Japanese suppliers in Mexico and Brazil: New expansions and plants

Recent activities of Denso, Toyoda Gosei, Aisan Industry, Keihin, TS Tech, Topre, Toray and other su

2015/07/01

Summary

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 This report is the second report on Japanese parts suppliers in Central and South America. It summarizes the trends of production capacity increase in Mexico, Brazil, and Paraguay (for eight months until mid-May 2015). For the new business operations in Mexico, please refer to the first report.

 In Mexico, three Japanese original equipment manufacturers (OEMs), Nissan, Mazda, and Honda, started production at their new plants successively between November 2013 and February 2014. Toyota also announced in April 2015 that it would construct a new passenger car plant with an annual production capacity of 200,000 units in Guanajuato, Mexico and start operations at the new plant in 2019. In addition, Audi and Kia Motors plan to start operations at their respective new plants in 2016. Other new plants are expected to be operational by a joint venture between the Renault-Nissan Alliance and Daimler in 2017, followed by BMW in 2019.

 In Brazil, the automotive market has been stagnant. Production and new registrations of cars for January through May 2015 continued to decline to 1.09 million units (down 19.1% y/y) and 1.11 million units (down 20.9% y/y), respectively. The slowdown in demand for vehicles caused stocks to pile up to nearly 370,000 units as of April 2015. OEMs are adjusting production by layoffs or collective vacation.
 Not many Japanese parts suppliers are building new plants in Brazil. Some suppliers are increasing their production capacities or reinforcing technical centers from a medium‐term perspective. Some Japanese suppliers produce labor-intensive products at plants in Paraguay, which is adjacent to Brazil.

Expansion of production capacities in Mexico (production items in parentheses)

Expansion of facilities and production lines at existing plants and production of new items  Sansho (window regulator parts), Sekisui Chemical (interlayer films for automotive laminated glass), Topre (stamping parts), Toray (large tow carbon fibers), Mitsui Chemicals (polypropylene [PP] compounds), Yorozu (suspension parts), TS Tech (addition of seat assembly line), and Unipres (installation of stamping machine and cutting line)
Sanoh Industrial (production of air shutter guides)
Expansion of plant buildings and plants Expansion of plant buildings: Aisan Industry (engine components) and Harada Industry (in-vehicle antennas)
New plant buildings: Keihin (installation of air-conditioning [A/C] condenser line), Nishikawa Rubber (body sealing products), and Suminoe Textile (moved plant to new site and introduced new line to produce needle punch carpets)
Second plants: Usui Kokusai Sangyo (fuel-injection device parts, etc.) and Hiroshima Aluminum (transmission cases)
Plants for new items: Topy Industries (industrial fasteners), Toyoda Gosei (interior and exterior parts), Toyota Tsusho (steel pipe processing), and Mitsubishi Electric (alternators, etc.)

New business developments in Brazil and Paraguay (production items in parentheses)

Establishment of new companies and start of operations at new plants Brazil: Asahi Glass (automotive glass), TS Tech (spin-off to intensively produce trim covers for automotive seats), and Musashi Seimitsu (differentials)
Paraguay: Sumitomo Wiring Systems (wire harnesses)
Enhancement of production capacities and strengthening of technical centers Brazil: Sumitomo Rubber (radial tires) and Denso (increase engineers at technical centers)

 
Japanese suppliers Related Reports:
* Japanese suppliers in Mexico (Jun. 2015)
* Southeast Asia (May 2015), the U.S. (Mar. 2015)
* China (Part 1): Southern, Central and Southwestern regions (Jan. 2015)
* China (Part 2): East/North/Northeast regions and overview (Feb. 2015)
* India (Nov. 2014)
* Mexico (Oct. 2014), Mexico and Brazil: Expanding capacity for local demand (Oct. 2014)
* Thailand (Sep. 2014)