Suddenly, Mexico Is a Major Auto Manufacturer Angelo Young - International Business Times
go to original August 29, 2014

The announcement was so important for his country's economy, Mexico's president delivered the news himself (see video below). On the same day that General Motors Co. said it would be calling home Cadillac SRX crossover production from Mexico in a deal worked out with the United Auto Workers union, South Korean automaker Kia Motors Corp. said it will spend more than $1 billion to construct its first auto manufacturing plant in Mexico, according to the Spanish language El Financiero news agency. President Enrique Peña Nieto made the announcement Wednesday in Mexico City, highlighting the country's determination to attract automotive investment.

“The Kia plant in LaGrange, Georgia, is working at capacity, and they had a choice to expand capacity there or follow what the industry has been doing in recent years,” Dean Barber, founder of Barber Business Advisors, a corporate site-selection advisor, told International Business Times by phone after the announcement was made. “Kia is building at the doorstep of the United States. Another good thing about that is Mexico has more free trade agreements than the United States, about 40.”

Bordering the world’s second-largest auto market to its north, Mexico has long been an ideal location for car manufacturing, especially after Canada, the U.S. and Mexico began dismantling protective trade barriers starting in 1994 with the North American Free Trade Agreement. At the time, Mexico produced a little more than one in 20 cars in North America; the most recent figures from the INEGI, the country’s statistics and census bureau, puts that figure at closer to one in five.

“Having a Korean company enter Mexico will mean that practically all global automakers will be represented in the country,” Armando Soto, president of Kaso y Asociados, a Mexico City auto industry consultant, told Bloomberg Businessweek.

Read the rest at The Trove

Photo: Presidency of the Republic

Anuncio de inversión de la Planta de Ensamble de Vehículos Kia Motors (Gobierno de la República)

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