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Mexico's Auto Sector To Receive Billions in New Investment Dollars

13 September, 2012

Several reports last week
chronicled the advancement of Mexico's booming auto sector. Bloomberg detailed
a plan from Mazda Motor Corporation to invest $500 million in a new plant in
Salamanca,while Dow Jones covered the government's announcement that the grand
total of foreign investment dollars being pumped into Mexico's auto sector will
likely reach more than $1.5 billion over the next year.

Mazda Motor Corp. announced plans
to build a $500 million state of the art manufacturing facility in Mexico that
will build more than $140,000 vehicles annually. The Japanese automaker has
steadily been increasing its presence in Mexico and Latin America. Operations
at the new plant are expected to begin no later than April of 2013 and the
facility will employ at least 3,000 employees,according to the report.

“Since Mazda entered the Mexican
market in 2005,our sales results have steadily improved,and in 2010 we set a
new record for both sales volume and market share,” said Mazda CEO Takashi
Yamanouchi. According to the Mexican Automobile Industry Association,Mazda's
sales have already risen 19 percent in 2011.

Mexico's economy minister Bruno
Ferrari announced he expects foreign investment to total at least $1.5 billion,
with nearly half that amount coming from Japan. He has been working with the
Japanese companies since before the tsunami hit earlier this year,but declined
to disclose any additional names in an effort to prevent a premature effect on
their share prices. 

 “I was actually concerned that [the tsunami] was going to slow down those
investments. But on the contrary,they are speeding up their investments,”
Ferrari stated. “I expect industrial production to continue growing.”

Mexico's economy grew 4.6 percent
from January to March of 2011 compared to the same period in 2010 and in April
Mexico's industrial production grew 1.4 percent year on year. Ferrari also
pointed out that Mexico is an excellent platform for foreign investors to set
up operations to export to other countries,“We have free trade agreements with
44 different countries and this means that Mexico has great export possibilities.”

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Topics: Investment