U.S. auto giant Ford has announced that it will invest US$2.5 billion in the construction of new automobile manufacturing plants in the Mexican states of Chihuahua and Guanajuato. The announcement comes just days after South Korea’s Hyundai and Japanese carmaker Toyota revealed their plans to build automobile plants in Mexico.
Now it is abundantly clear that global automakers are ramping up in Mexico. The trend began late last year, when General Motors said it would invest $3.5 billion to expand and modernize its four auto manufacturing plants.
Ford will create 3,800 direct jobs, while Toyota said it will create in excess of 2,000 jobs in Mexico. It seems automakers are shifting from offshore to nearshore, taking advantage of Mexico’s low labor costs and proximity to the lucrative U.S. market.
Other advantages that manufacturers want to capitalize on are Mexico’s free trade agreements with nearly 45 countries and and the country’s robust transportation network that makes it easy to export cars and trucks.
In a statement, Ford announced three major projects: a new engine plant in Chihuahua, expansion of diesel engine lines in Chihuahua and a new transmission plant in Guanajuato.
“Ford is making a significant commitment to our business in Mexico with investment in two new facilities, while aiming to make our vehicles even more fuel-efficient with a new generation of engines and transmissions our team in Mexico will build,” said Joe Hinrichs, Ford’s President of The Americas.
Auto engines manufactured in Mexico will be exported to the United States, Canada, South America and the Asia-Pacific region.
Ford already has 11,300 employees in Mexico, and the company’s top model cars – including the Ford Fiesta, Fusion and Lincoln MKZ – are manufactured in the country. Ford has also established an Engineering Center in Mexico, which employs more than 1,100 engineers.
“Currently within Ford, Mexico is the fourth vehicle producer, the fourth largest engine producer and is the second largest nation supplying Ford’s global manufacturing facilities,” said Gabriel Lopez, Ford Mexico’s president and CEO.