Japanese automakers shift to Mexico to export vehicles

Business & Finance Featured Japan - February 26th, 2013

More Japanese automakers have shifted their manufacturing to Mexico, driving the Central American country towards becoming one of the largest vehicle export bases in the world.

Mexico’s vehicle production in 2012 was 2.88 million units, up 12.8% from the previous year, with about 80% of cars made in the country for export. The surge in vehicle exports is due largely to Japanese automakers’ forays into the country, squeezed by a strong yen and high production costs at home, The Asahi Shimbun reports.

Nissan Motor Co. produces more than 380,000 vehicles a year at its plant in Aguascalientes with about 80% of all the products exported to 100 foreign countries, including the United States. The plant operates almost 24 hours a day, six days a week.

Nissan plans to start up its third factory in the country at the end of this year.

“We make a vehicle every 55 seconds,” said Armando Avila Moreno, vice president for Nissan Mexicana. “Our speed is fastest in the world.”

Honda Motors Co. also plans to expand operations in 2014 with a second factory in Guanajuato, central Mexico, which will be able to produce 200,000 cars annually. The company plans to shift production of 50,000 Fit compact models from its plant in Sayama, Saitama Prefecture (just north of Tokyo) to Mexico.

“Mexico is becoming the ‘Ginza’ (traditionally Tokyo’s most upmarket shopping district) of car production,” Honda President Takanobu Ito told The Asahi Shimbun.

Mazda Motor Corp. is considering to transfer the production of its Axela model and compact vehicle Demio to Mexico. The carmaker intends to build a new Mexican plant in 2014, with a production capacity of 230,000 vehicles per year.

Manufacturers of car parts are also seeking opportunities to expand their business in Mexico. About 50 Japanese parts manufacturers already have operations in Mexico and the number is expected to increase.