Top news agencies CNN,the Wall Street Journal,Fox Business and USA Today have all reported on Volkswagen’s plans to begin producing the larger,lighter new VW Golf G7 in Mexico for the U.S. market. To support this increase in production,the auto giant also recently opened a new engine plant in the city of Silao in Mexico real estate.
The CNN Headline read,“VW CEO: Mexico key in quest to become world’s top carmaker,” which is a statement that cannot be taken lightly by investors worldwide,since Mexico is already the fourth largest auto exporter in the world. In addition,the U.S. has become a very important market for Volkswagen,with sales climbing more than 25 percent in 2012 alone.
“Mexico is our main product delivery hub for the USA,” shared VW CEO Martin Winterkorn,according to CNN. “In this regard Mexico plays a very important role – specifically for the U.S. market for which we want to produce and sell one million vehicles by 2018.”
According to Fox Business,the new plant in Silao boasts a maximum annual capacity of 330,000 engines that will supply the automaker’s plant in Puebla,Mexico,which is also where the new Golf G7 will be manufactured. The new plant in Silao will reportedly create more than 700 new jobs,in addition to the nearly 19,000 workers already employed in Puebla,where more than 600,000 cars were made in 2012 alone.
To put those numbers in perspective,according to USA Today the typical U.S. factory only employs around 3,000 workers and produces around 200,000 cars each year. Furthermore,in addition to assembling cars,Puebla’s workers also machine engine and axle parts and stamp body parts. This makes Mexico’s workers more valuable than their U.S. counterparts,who typically only assemble parts,while engines and other heavy components are shipped in from outside sources.
“Last year,Volkswagen’s sales jumped 31 percent to 580,279 cars,” writes the Wall Street Journal. “In addition to its Puebla plant [and the new plant in Silao] Volkswagen plans to build a $1.3 billion Audi plant in Mexico by 2016.”