Mexico is quickly emerging as the world’s top automobile manufacturing hub,as some of the world’s most influential auto corporations continue to pour hundreds of millions of dollars into ramping up production and building new operations in Latin America’s second largest economy. The latest good news involves a nearly $700 million dollar investment by General Motors,which will bring new jobs and boost the national economy.
“With numerous free trade agreements,a cheap,well-educated labor force,and proximity to the lucrative U.S. auto market,combined with growing demand in South America,automakers have been lining up for two years to set up shop or expand in a country that some analysts believe could eventually overtake Brazil as Latin America’s biggest economy,” writes Reuters. “The plans include a new factory in Silao in central Mexico to build 8-speed transmissions and an upgrade to an existing factory in San Luis Potosi that will make next-generation transmissions.”
The automobile manufacturing industry accounts for more than 20 percent of Mexico’s GDP in the sector. As such a key part of Mexico’s economy,the automotive industry annually accounts for a large portion of foreign direct investment and is one of the most lucrative parts of the nation’s manufacturing sector.
General Motors has had operations in Mexico real estate since 1935 and accounts for the second largest vehicle output in the country,second only to Nissan. As the eighth largest producer of automobiles in the world,Mexico is poised to emerge as a major international player in this sector over the coming years as more manufacturing shifts away from China to Latin America.
“GM also said its in-vehicle OnStar service that connects drivers to live operators for directors or emergency help is now available on select cars in Mexico,” Reuters reports.
Of the total $691 million investment,$349 million will reportedly be spent to build the new transmission plant in Silao,while $211 million will be spent on the Toluca expansion and the remaining $131 million will be used to expand an existing plant in San Luis Potosi. These investments are part of a $900 million investment package that GM committed to Mexico back in 2011. GM currently builds Chevy Silverado and GMC Sierra trucks in Silao,while the San Luis Potosi plant currently manufactures Chevy Aveo,Trax and Tracker automobiles.