Japanese suppliers in Latin America (Part 1): New plants in Mexico
Recent developments at FCC, Koito, JTEKT, NHK Spring, Yachiyo Industry
This report summarizes Japanese suppliers' new plants in Mexico built in about nine months up to early February 2014. In 2013, vehicle production in Mexico, excluding heavy-duty buses and trucks, increased by 1.7% year on year to 2.93 million units. Vehicle exports increased by 2.9% y/y to 2.42 million units and sales expanded by 7.7% y/y to 1.06 million units. Production, exports and sales all grew, even by slight margins, to the record highs. We will separately report on production capacity expansion in Mexico and situations in Brazil.
Under such circumstances, Japanese OEMs are further increasing their production capacities in Mexico as bases of export operations to the Americas. In Aguascalientes, Nissan opened a new plant in November 2013. In Guanajuato, Mazda and Honda started their new production operations in January and February in 2014, respectively. We will separately report on production capacity expansion in Mexico and situations in Brazil.
[Objectives of new plants in Mexico]
|Mainly to meet increased demand in Mexico||Asahi Glass (AGC): Re-entry into production operations in Mexico, NHK Spring, Nippon Steel & Sumitomo Metal, Yachiyo Industry|
|As a supply base for the Americas||IBIDEN, FCC, Keihin, F-Tech, Daido Metal: Re-entry into the North American market|
|To reduce costs through cooperation with U.S factories||Imasen Electric Industrial, Keihin, Toyoda Gosei|
Japanese Suppliers Related Reports:
Japanese suppliers in Latin America (Part 2): Trends in Brazil and Mexico (Feb, 2014)
Thailand (1) (Jan. 2014), Thailand (2) (Jan. 2014), ASEAN (Nov. 2013),
Russia and Eastern Europe (Oct. 2013), India (Sep. 2013),
Northern/Northeastern/Southwestern China (Aug. 2013), Southern and Central China (Aug. 2013), Eastern China (Jul. 2013),
the US (Jul. 2013), Mexico and Brazil (Jun. 2013)
New plants in Guanajuato, Jalisco and Queretaro
|Imasen Electric Industrial Co., Ltd.||
Production of automotive seat adjusters started at new plant in January 2014Imasen Mexico Technology S.A. de C.V. constructed a one-billion-yen plant in Guanajuato and started manufacturing automotive seat adjusters in January 2014. The new plant performs the welding process, transferred from Imasen's plant in Ohio, U.S., and sends the welded products to the Ohio plant, which will assemble them into seat adjusters. By taking advantage of local low labor costs, the company aims to increase production capacity in North America. Imasen has increased its planned production volume, so it will start the second phase construction within the fiscal year ending March 2015 (FY 2014),one year ahead of the original plan.
|Usui Kokusai Sangyo Kaisha, Ltd.||
Operations to start at new automotive pipe processing plant in August 2014Usui Kokusai Sangyo invested JPY 2 billion in Usui International Manufacturing Mexico, S.A. de C.V. for construction of a new plant to process automotive fuel pipes in Guanajuato. The plant will be operational in August 2014. It will manufacture rod-shaped pipes in Japan and send them to Mexico for bending work. It is a part of the company's efforts to increase production capacities in Asia and North America.
Operations started at new suspension plant in January 2014F-Tech's subsidiary in Guanajuato, F&P MFG.DE MEXICO S.A. DE C.V., started operations at its new plant in January 2014. The products including suspension sub-frames and pedals are supplied to GM and Honda. The company aims to achieve sales of USD79 million when the plant will be fully operational in FY2018.
Operations at new plastic parts plant to commence in March 2014SANSHO MEXICANA, S.A.de C.V., Queretaro will start operations at its new plant in March 2014. It will manufacture injection-molded plastics parts including housings for window regulators and expects to achieve sales of JPY 100 million in2014. Japanese tier 1 suppliers in Mexico will purchase the products. It plans to supply to North and South Americas in the future as well.
|Nippon Steel & Sumitomo Metal Corporation||
Operations at new automotive pipe JV plant started in 2013Nippon Steel & Sumitomo Metal Corp's joint venture (JV) in Guanajuato, Nippon Steel & Sumikin Pipe Mexico, S.A. DE C.V. started manufacturing medium to high-grade steel pipes for automotive application at its new plant at the end of May 2013. With the monthly production capacity of approx. 2,000 tons, it will supply to Japanese, European and U.S. OEMs and automotive parts suppliers. Nippon Steel & Sumikin Pipe Co. holds 55%, SPT & SC Investment Co. holds 25% and Metal One Corp. holds 20% of the JV. SC Investment Co. is a JV of Nippon Steel & Sumikin Pipe and Sumitomo Corp., each holding 75% and 25% respectively.
|Suminoe Textile Co., Ltd.||
New floor mat plant to be fully operational in 2014Suminoe Textile established Suminoe Textile de Mexico, S.A. de C.V. in Guanajuato in June 2013 and plans to commence full operations at its plant in 2014. It aims to produce floor mats for 40,000 vehicles per month at an early stage to supply to local plants of Mazda, Honda and Nissan. It also plans to expand the product lineup to include car carpets and headliners.
|NHK Spring Co., Ltd.||
Production subsidiary for stabilizers and coil springs establishedNHK Spring established NHK SPRING MEXICO, S.A.DE.C.V. in Guanajuato in September 2013, which will produce cold-formed coil springs in addition to originally planned stabilizers. In February 2015 the new plant will start production eight months ahead of schedule. In response to the expanding Mexican market, it aims to achieve sales of USD 29 million in FY 2018.
|Daido Metal Co., Ltd.||
Engine bearings production for the North American market started in 2013 to serve as a base to re-enter into the North American marketDaido Metal started production of engine bearings at Daido Metal Mexico S.A. de C.V. in Jalisco in July 2013 with JPY3 billion investment. The initial production capacity is bearings for 250,000 engines. The company has supplied engine bearings to the U.S. market from Japan, Thailand and Czech Republic, which will be gradually replaced by Mexican made bearings. From 2014, production will increase in order to meet new orders from Japanese OEMs in Mexico. It is, therefore, planning to considerably increase the capacity to bearings for five million engines by 2016. The additional investment will be JPY3 billion. It also plans to utilize the Mexican plant as an export base to Brazil. Daido Metal Mexico plans to turn a single-year profit in 2015.
|Hiruta Kogyo Co., Ltd.||
Production of suspension parts beganA new plant of Hiruta Mexico S.A. de C.V., Guanajuato was inaugurated in June 2013 and production of suspension parts commenced at the end of 2013. It supplies to Japanese OEMs and parts manufacturers in Mexico. The sales target for 2016 is JPY2.5 billion.
|Yachiyo Industry Co., Ltd.||
New fuel tank/sunroof plant inaugurated in November 2013Yachiyo Industry established Yachiyo Mexico Manufacturing S.A. de C.V. in Guanajuato in February 2012 and started operations at the new plant in November 2013. The annual production capacity is 200,000 units each for fuel tanks and sunroof systems. Production at Ohio and Alabama plants in the U.S. are transferred to this Mexican plant to supply to Honda's plants in Mexico for the CR-V, Vezel and Fit.
|Yutaka Giken Co., Ltd.||
Production of exhaust and drive train systems began in January 2014The new plant of YUTAKA TECHNOLOGIES DE MEXICO S.A. DE C.V., started production in Guanajuato in January 2014. It supplies 200,000 units each of torque converters, exhaust gas purification systems, and silencers per year in order to support Honda's production expansion in North America. The new plant also delivers components to Yutaka Giken's existing plants in the U.S. in an aim to improve profitability of its North American operations.
New plants in San Luis Potosi
|Asahi Glass Co., Ltd.(AGC)||
To re-enter into Mexico to start producing laminated automotive glass from 2016AGC announced in November 2013 its plan to establish AGC Automotive Mexico S.A.de C.V. in San Luis Potosi in order to manufacture laminated automotive glass from the beginning of 2016. It will initially start with the production capacity of laminated glass for approx. 750,000 vehicles/year, to be doubled in the future based on the demand situation. Though it has shipped out products manufactured at the U.S. plants to meet the demand in Mexico, local production will start. The company has withdrawn from production in Mexico since 2007.
|IBIDEN Co., Ltd.||
New DPF manufacturing base to be operational in 2015IBIDEN Mexico, S.A.de C.V., established in San Luis Potosi in August 2013, plans to build a new plant with a total investment of JPY 13 billion. It will start manufacturing Diesel Particulate Filters (DPF) in June 2015. Currently IBIDEN exports DPF to the Americas from Japan and Hungary, but it plans to establish the new plant in Mexico as a production base to serve the Americas.
CVT clutch factory to commence production in FY2015FCC AUTOMOTIVE PARTS DE MEXICO, S.A. DE C.V., established in San Luis Potosi in June 2013, will start producing CVT clutches in FY 2015 to supply to Honda's transmission plant in Mexico. It will also complement its production operations in the U.S. through shipments to the North American clients including Ford and ZF. The sales target for FY 2017 is JPY 6 billion.
AC parts mass production began in July 2013Engine parts production to start in FY2014. KEIHIN DE MEXICO S.A.DE C.V., was established in San Luis Potosi in February 2012. The plant started mass production of automotive parts including intake manifolds and air conditioning condensers two months ahead of schedule in July 2013. The Mexican plant will complement its U.S. operations as the company has some concerns about its production capacity in the U.S. In FY 2014, it will transfer production of some V6 engine parts suitable for a labor-intensive process from the North American plants to the Mexican plant in order to raise competitiveness.
|Koito Manufacturing Co., Ltd.||
Production of headlamps and fog lamps to start in July 2014North American Lighting Mexico, S.A. de C.V., Koito's subsidiary in San Luis Potosi, will inaugurate a new plant in July 2014. It will produce lighting equipments such as headlamps and fog lamps for one million vehicles per year. The major clients are Japanese and U.S. OEMs including Toyota, Nissan, Honda, GM and Ford. It will also boost the production capacity of lighting equipment for one million vehicles at its plant in Paris, Illinois, the U.S. This will raise the total capacity of its North American operations to parts for five million vehicles/year in FY 2014.
EPS production site establishedJTEKT established JTEKT AUTOMOTIVE MEXICO, S.A. DE C.V. in San Luis Potosi in February 2014. The company will invest approx. JPY 8 billion to build an electric power steering (EPS) plant with an annual production capacity of 900,000 units, which is scheduled for opening at the end of 2015. Initially it will supply to Japanese OEMs in Mexico for their compact cars.
|Soko Seiren Co., Ltd.||
Operations at seat material plant to begin in 2014Soko Seiren established SOKO SEIREN MEXICANA, S.A.DE C.V. in San Luis Potosi in January 2013, which is scheduled to inaugurate an automotive seat material plant in May 2014. The products will be supplied to Japanese seat manufacturers. It plans to produce 1.4 million meters of seat materials per year in 2016.
|Chuo Precision Industrial Co., Ltd.||
Automotive aluminum wheel manufacturer establishedChuo Precision Industrial established an automotive aluminum wheel manufacturer, Central Motor Wheel of Mexico Co., Ltd. in San Luis Potosi in August 2013. The plant is scheduled to start operations in August 2015 with the initial production capacity of 500,000 wheels. All the products will be supplied to Toyota's U.S. plants in the beginning. The company will propose the products to other OEMs later. It will raise the production capacity gradually based on the market situation.
New plants in Aguascalientes
|Kitagawa Iron Works Co., Ltd.||
Iron casting plant will commence mass production in May 2014.KITAGAWA MEXICO，S.A. de C.V., Kitagawa Iron Works' JV with Nippon Steel & Sumikin Bussan Corp. in Aguascalientes will start manufacturing and processing iron cast automotive parts in May 2014. It expects to supply 500 tons per month.
|Shoshiba Manufacturing Co., Ltd.||
Pressed parts production started in December 2013.Shoshiba Manufacturing established SANSHO MEXICANA, S.A.de C.V. in 2013 in Aguascalientes. It started producing airbags and pressed parts including seat frames in December 2013 at a rented plant. The customers are mainly Japanese Tier 1 suppliers. It aims to achieve sales of JPY1 billion in five years. (Reported in June 2013.)
|Fuji Kiko Co., Ltd.||
A/T shifter manufacturing company establishedFuji Kiko established FUJIKIKO MEXICO, S. A. DE C. V., a manufacturer of automotive A/T shifters, with a capital of USD2.6 million in Aguascalientes in September 2013. Production commencement is scheduled for the spring of 2015. It will target Nissan and other Japanese OEMs in Mexico as its customers.
|The Yokohama Rubber Co., Ltd.||
To consign AC hoses production to a local company and start supplying in summer 2014YH America Inc., the U.S. subsidiary of Yokohama Rubber, will begin production of automotive air conditioning hoses in Mexico. It plans to supply to Japanese OEMs in Mexico from the summer of 2014. It will consign production to a local company to reduce burden in investment. The company also aims to expand business with the Big Three U.S. automakers. The plant will be located in the suburbs of Aguascalientes.
New plants in the Mexican states along U.S. border
|Nippon Steel & Sumitomo Metal Corp. (NSSMC)||
Local JV started producing hot-dip galvanized & galvannealed steel sheets in 2013.TENIGAL S.de R.L. de C.V., NSSMC's JV in Nuevo Leon, Mexico, started production at its new plant in August 2013. With the state-of-the-art equipment equivalent to that of NSSMC's latest facility in Japan, the new plant manufactures high-grade, high quality automotive hot-dip galvanized & galvannealed steel sheets including outer panels and high-strength steels. With the annual production capacity of 400,000 tons, it will supply to Japanese OEMs in Mexico. NSSMC holds 49% and Ternium S.A. holds 51% of the JV.
|Toyoda Gosei Co., Ltd.||
Automotive hose manufacturing subsidiary to start production in 2015Toyoda Gosei Rubber Mexico, S.A. de C.V., established in July 2013 in Tamaulipas, rented a building as its new plant and installed equipments. It will start manufacturing fuel hoses and water hoses in February 2015. In order to raise its cost-competitiveness in North America, some of the products of its plant in Kentucky, U.S. will be transferred to this new Mexican plant. Initially, the products will only be supplied to Toyota's plants in North America. In the medium to long term, however, it aims to receive orders from other OEMs in Mexico.
|Higuchi Manufacturing Co., Ltd.||
New air-bag components' plant constructedHiguchi Manufacturing Mexico S. DE R.L. DE C.V. is building a presswork plant in Coahuila. It will start manufacturing safety-related parts including airbag inflator cases and seat belt retractor bases in August 2014. The company has decided on this investment as it expects larger orders from major OEMs in the Central and South America.
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