Japanese suppliers in Mexico: New plants built to satisfy OEM demand

Recent developments at Aisan Industry, Asahi Glass, NTN, KYB, Nidec Tosok, and others

2014/10/10

Summary

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 In Mexico, the volumes of automobile production (excluding large buses and heavy-duty trucks) and exports both hit their record highs between January and September 2014. In terms of figures, production increased by 7.5% year-over-year (y/y) to 2.40 million units and exports by 8.7% y/y to 1.95 million units. Sales increased by 4.5% y/y to 790,000 units, which are hit record levels. Under such circumstances, several Japanese OEMs have started operations at their new plants. Nissan started production at its new plant in November 2013, followed by Mazda in January 2014 and Honda in February 2014. Also in 2015 and later, new plants are expected to be constructed by a joint venture between Nissan and Daimler as well as independently by Audi and BMW.

 Many Japanese parts suppliers are continuously building new plants in Mexico, while some are rapidly expanding their production capacities. Some suppliers expand sales to new customers and add production items.

 This report summarizes Japanese parts suppliers' new plants in Mexico in the ten months to mid-September 2014.



Japanese suppliers Related Reports:
* Thailand (Sep. 2014)
* Indonesia (Jun. 2014), Vietnam, Malaysia, Laos, and Myanmar (Jun. 2014), Europe (Jul. 2014), the U.S. (Apr. 2014)
* China (Part 2): Northern, Northeastern & Southern regions (Mar. 2014),
  China (Part 1): Eastern and Central China (Mar. 2014)
* Latin America (Part 2) (Mar. 2014), Latin America(Part 1) (Mar. 2014),
* India (Sep. 2013)

New plants in Mexico (production items in parentheses)

New plants established independently  Aisan Industry (engine parts), Asahi Glass (windshield glass), Asmo (small motors), Inabata & Co. (plastic compounds), NTN (bearings), Shinano Kenshi (small precision motors), Seiren (interior materials), Sumitomo Electric Sintered Alloy (sintered products), Nidec Tosok (control valves), Mabuchi Motor (small motors), Murakami Corporation (rear view mirrors), and Riken (valve lifters)
New plants established jointly  Shinsho Corporation and Kobe Steel (cold heading steel wires), Topy Industries (steel wheels), and Kitagawa Iron Works and Nippon Steel & Sumikin Bussan (casting)
Production capacity added to sales-only subsidiary  Fukoku (functional components)
Operations started at new plants, followed by additional investment to increase production volume and items  Kayaba Industry (shock absorbers, besides conventional vane pumps for CVTs), DaikyoNishikawa (plastic parts), Tsubakimoto Chain (timing chains), Central Motor Wheel (aluminum wheels), Tohken Thermo Tech (additional heat treatment items), Nishikawa Rubber (body sealing products), Nissin Kogyo (brakes), and Musashi Seimitsu Industry (transmission components, besides conventional engine components)


Mexico: New plants in Guanajuato and Queretaro

 

Company Activities
Asmo
Establishes plant for small motors and related components; operations expected to start in April 2016
In July 2014, Asmo established Asmo Mexico S.A. de C.V. (tentative name) in Guanajuato. The new plant is scheduled to start operations in April 2016. USD 52.4 million will be invested in this plant. The plant will produce small motors for automotive seats and power windows as well as wiper components. In 2020, the plant will produce 450,000 units of seat motors and 150,000 units of power window motors. The company plans sales of USD 90 million in 2020.
Inabata & Co.
Plastic compound plant starts production in June 2014
In June 2014, Inabata & Co. started producing colored synthetic plastic compounds at IK Plastic Compound Mexico, S.A. de C.V. in Guanajuato. JPY 700 million has been invested to develop an annual production capacity of 10,200 tons. As Japanese OEMs are starting local production one after another, the company aims to supply molding compounds for mirrors and doors to Japanese suppliers. By 2016, Inabata plans to increase the capacity to 30,000 tons through additional investment.
Kayaba Industry
Starts producing vane pumps for CVTs in September 2014; production of shock absorbers also to start in 2015
In September 2014, Kayaba Industry (KYB) started producing vane pumps for continuously variable transmissions (CVTs) at KYB Mexico S.A. de C.V. in Guanajuato. The annual production capacity is 1.2 million units. With an investment of JPY 2.5 billion, a new plant will be constructed within the same premises to start producing shock absorbers in December 2015. The plant will produce 970,000 units in 2016. The company is shifting imports from Japan and the U.S. to local production because demands from OEMs and the aftermarket are expected to increase in Mexico. In the future, production for the North, Central, and South American markets will be concentrated in Mexico.
Kobe Steel and Shinsho Corporation
To establish JV for CH steel wires; operations expected to start at end of 2015
In September 2014, Shinsho Corporation and Kobe Steel announced that they have agreed to establish a joint venture (JV), Kobelco CH Wire Mexicana, S.A. de C.V., in Guanajuato. The JV will produce and sell cold heading (CH) steel wires and be capitalized at JPY 4.3 billion. Shinsho Corporation will own 40% of shares, followed by 25% by Metal One, 10% by Kobe Steel, Osaka Seiko, and Grupo Simec (of Mexico), respectively, and 5% by O&k American Corporation (of the U.S.). At the end of 2015, the JV is expected to start supplying CH steel wires for fasteners and cold forged components. JPY 4.3 billion will be invested in total to develop an annual production capacity of 40,000 tons.
Shinano Kenshi
To establish new plant for small precision motors
In May 2014, Shinano Kenshi announced that the company will establish a plant for small precision motors in Guanajuato. Production is set to start in the second half of the fiscal year ending in March 2016 (FY 2015). The company will invest JPY 300 million, mainly on production facilities, while renting land and building. The plant will initially produce air conditioning blower motors for U.S. parts suppliers. Then, Shinano Kenshi plans to start producing battery cooling motors for hybrid and electric vehicles depending on demand. The company aims at sales of JPY 2 billion in FY 2018.
Seiren
Establishes interior material subsidiary; to start production in November 2015
In July 2014, Seiren established a subsidiary, Viscotec Mexico S.A. de C.V., in Queretaro for producing and selling interior materials. It was capitalized at JPY 80 million. The plant is expected to start producing knit and textile seat materials in November 2015. The company aims to respond to a surge in Japanese OEMs' vehicle production in Mexico and to introduce high-value-added products into the North American market.
Daikyo Nishikawa
Starts producing plastic parts in January 2014
DaikyoNishikawa plans to increase its global production of plastic oil strainers by 26% from the 2013 level to 10 million units in 2018. As part of its plan, the company will increase the production volume at DaikyoNishikawa Mexicana, S.A. de C.V. in Guanajuato, which started production in January 2014. At present, products, including bumpers and instrument panels, are mainly being supplied to Mazda. In the future, DaikyoNishikawa aims to expand its sales to new customers in Mexico as well as to other American countries.
Tsubakimoto Chain
New timing chain plant starts operations in April 2014
In April 2014, Tsubakimoto Chain started operations at a new plant of Tsubakimoto Automotive Mexico S.A. de C.V. in Guanajuato. The plant mainly produces timing chain systems for engines. Within FY 2014, additional equipment will be introduced to enhance its production and supply capacity. Eventually, the company plans to use this plant also as a production base for the South American market and as a global hub for component procurement.
Topy Industries
Steel wheel JV plant to start operations in April 2015; production volume to be increased gradually
In September 2013, Topy Industries established a JV, Topy MW Manufacturing Mexico S.A. de C.V., in Guanajuato. It was capitalized at USD 13 million, with 75% owned by Topy Industries and 25% by MWG (of Italy). The plant is scheduled to start producing steel wheels in February 2015. The production volume will be 750,000 units in nine months in 2015 and be doubled to 1.75 million units in the full year of 2016. About half of its products will be supplied to Nissan's new plant and the rest will be sold to Japanese and U.S. automakers as well as to European OEMs through MWG's sales channel.
Nishikawa Rubber
To expand automotive body sealing plant
In October 2013, Nishikawa Rubber started operations at a new plant of Nishikawa Cooper Mexico S.A de C.V. in Silao, Guanajuato. By 2016, its second plant building will be expanded to increase the production capacity for automotive body sealing products. Manufacturing processes will be consolidated within each building to increase productivity. The number of workers will be doubled to meet increasing demand from Japanese OEMs.
Nissin Kogyo
New brake plant starts operations in January 2014; planning to enhance production capacity
In January 2014, Nissin Kogyo started producing disk and drum brakes at a new plant of Nissin Brake de Mexico, S.A. de C.V. in Guanajuato. By the end of FY 2014, raw material and processing lines will additionally be established. Through gradual capital investment, the annual capacity will be increased in stages to produce brakes for 400,000 to 500,000 vehicles by FY 2016.
Fukoku
To establish plant for functional and brake components; to start production in July 2015
In January 2014, Fukoku established Fukoku Mexicana, S.A. de C.V. in Queretaro as a sales subsidiary. In June 2014, the company decided to add manufacturing capacity to this subsidiary through additional investment. To produce functional and brake components, a plant will be constructed to start operations in July 2016. The additional investment will increase the subsidiary's capital to JPY 740 million. Sales of JPY 1.1 billion are expected in 2017.
Fujikura Rubber
Considering starting production in Mexico in three to five years
Fujikura Rubber is considering starting production in Mexico within three to five years. Because it is difficult to enter a new market through green field investment, the company is considering partnership with a local company via its U.S. subsidiary. (Source: a press release in May 2014)
Nachi-Fujikoshi
To set up new bearing plant; to start operations in 2016
In July 2014, Nachi-Fujikoshi announced its plan to establish a new plant for bearings and other products. The plant is expected to start operations in 2016 to supply bearings for transmissions and constant velocity joints (CVJs) to Japanese and U.S. automakers. JPY 2.5 billion to JPY 3 billion will be invested in this project. Details including location and planned sales are yet to be determined. The company is also considering producing tools and robots in the future.

 

 



Mexico: New plants in San Luis Potosi

 

Company Activities
Aisan Industry
Constructing new plant for engine components; to start operations in spring 2015
Aisan Industry established Aisan Autoparts Mexico, S.A. de C.V. in San Luis Potosi in February 2013 and its new plant is expected to start operations in spring 2015. The company will invest JPY 3 billion in this project. The new plant will produce throttle bodies for Nissan. An annual production is planned at 500,000 units in FY 2016. Currently, this product is being supplied from its plant in Kentucky, the U.S. The plant's production will gradually be transferred to Mexico, as Nissan is starting operations at its new Mexican plant. In the future, additional investment is planned to expand the product lineup to include engine functional components, such as fuel pump modules.
Asahi Glass
To start producing laminated glass for windshields at new plant in January 2016
Asahi Glass established AGC Automotive Mexico S.A. de C.V. in San Luis Potosi in November 2013 and held a groundbreaking ceremony for its new plant in June 2014. Production is scheduled to start in January 2016. The plant will produce laminated glass for windshields, with an initial annual production capacity for 760,000 vehicles. JPY 6 billion will be invested in this plant. Eventually, the capacity will be increased to produce glass for 1.5 million vehicles per year.
Central Motor Wheel
To start producing aluminum wheels in August 2015; production capacity to be expanded in mid-term
In August 2013, Central Motor Wheel established an aluminum wheel production company, Central Motor Wheel of Mexico Co., Ltd., in San Luis Potosi. Its plant is expected to start operations in August 2015, with an initial annual production capacity of 500,000 units. Later, the company intends to expand the volume to 1 million units in the mid-term, as the North American market continues to recover.
Nidec Tosok
Sets up new company to produce control valves for automatic transmissions; production to be started in August 2016
In May 2014, Nidec Tosok established Nidec Tosok de Mexico, S.A. de C.V. in San Luis Potosi to produce control valves for automatic transmissions (ATs). It was capitalized at JPY 1.6 billion. The plant is expected to start operations in August 2016. The company will invest JPY 4.5 billion in the first phase. As a whole of the three phases, JPY 15 billion will be invested in total. The company is developing its local supply capacity to meet increases in production of ATs and CVTs at its customers, Jatco and Honda.
Musashi Seimitsu Industry
Installing new production lines for transmission parts at new engine parts plant
In January 2014, Musashi Seimitsu Industry started producing engine and steering components at a new plant of Musashi Auto Parts Mexico, S.A. de C.V. in San Luis Potosi. The company is now installing additional production lines for differential and planetary gears to start production in autumn 2014. JPY 4 billion will be invested in this plant. In addition to supplying unit parts to Honda, the company aims to expand its sales to other Japanese and U.S. automakers.

 

 



Mexico: New plants in Aguascalientes and Zacatecas

 

Company Activities
NTN
To start producing hub bearings and CVJs at new plant in FY 2015
NTN established NTN Manufacturing De Mexico, S.A. de C.V. in Aguascalientes in April 2013 and started constructing a plant there in May 2014. The company plans to start producing third-generation hub bearings and CVJs in FY 2015. Capital investment is expected to reach JPY 12 billion. Although products are initially supplied to customers in Mexico, the company later intends to use the plant as its supply base for the entire North American market, capitalizing on free trade agreements and other measures. NTN aims to post sales of JPY 20 billion in FY 2018.
Kitagawa Iron Works
Integrated production of casting parts starts in May 2014
In July 2013, Kitagawa Iron Works completed a new plant of Kitagawa Mexico, S.A. de C.V., which is a JV with Nippon Steel & Sumikin Bussan, in Aguascalientes. The plant started production and supply of casting parts in September 2013. Then, a casting process facilities were completed in November 2013 and integrated production from casting to processing started in May 2014. The plant has an annual production capacity of 6,000 tons. In addition to Jatco, which is its major customer, the company aims to expand its sales to new customers.
Sumitomo Electric Sintered Alloy
Establishes production and sales subsidiary for sintered products; to start production in 2016
In August 2014, Sumitomo Electric Sintered Alloy established Sumitomo Electric Sintered Components Mexico, S.A. de C.V in Aguascalientes to produce and sell sintered products. The new subsidiary is expected to start producing engine and transmission components in July 2016. JPY 3 billion will be invested to develop an annual production capacity of 2,000 tons. Sales of JPY 2 billion are expected in FY 2017.
Tohken Thermo Tech
First heat treatment plant starts operations in January 2014; second plant to be completed within 2015
In January 2014, Tohken Thermo Tech started operations at the first plant of Tohken Thermo Mexicana, S.A. de C.V. in Aguascalientes. The plant started heat treatment processing for transmission parts under contract. As orders from new customers are expected in the future, the company will complete the second plant by October 2015 to develop heat treatment processing capacity for suspension and other related components. Facility expansion is also planned for the first plant. In total, JPY 4.6 billion will be invested in the first and second plants. The company aims at sales of JPY 1.2 billion in 2017.
Nagakura Mfg.
Sets up AT parts production subsidiary
In January 2014, Nagakura Mfg. established a local subsidiary in Zacatecas. Its plant will be completed in November 2014 and start supplying AT components to U.S. automakers as well as to Japanese and German parts suppliers in May 2015. JPY 1 billion will be invested in this plant. The company expects sales of JPY 3 billion in the fiscal year ending in September 2017.
Mabuchi Motor
Establishes subsidiary to produce small motors; plant expected to start operations in summer 2016
In July 2014, Mabuchi Motor established Mabuchi Motor Mexico, S.A. de C.V. in Aguascalientes. JPY 5.7 billion will be invested to construct a plant, which is scheduled to start operations in summer 2016. The plant will produce small electrical motors. The annual capacity is expected to be 10 million units in 2018.
Murakami Corporation
Sets up rear view mirror production subsidiary in February 2014
In February 2014, Murakami Corporation established a subsidiary, Murakami Manufacturing Mexico, S.A. de C.V., in Zacatecas, to produce rear view mirrors. It was capitalized at USD 3 million. The capital may be increased depending on the progress of plant construction and equipment installation in the future. Production is scheduled to start in 2016.
Riken
Valve lifter plant starts operations in July 2014
In July 2014, Riken started operations at a plant of its local subsidiary, Riken Mexico, S.A. de C.V. in Aguascalientes. Initially, the plant supplies valve lifters mainly to Japanese OEMs. The company also intends to use this plant as an export hub to North and South America.

 

 



Mexico: New plants in other states, including those along U.S. border

 

Company Activities
Alps Electronics
Sales subsidiary starts full-scale operations in April 2014
In August 2013, Alps Electronics established a sales subsidiary, Alps de Mexico S. de R.L. de C.V., in Tamaulipas. The subsidiary is located in a building of Alcom Electronicos Mexico, which is an automotive electrical device plant that was established jointly by Alps Electronics and Alpine. It was capitalized at MXN 50,000 and became fully operational in April 2014. The subsidiary was established to purchase, sell, import, and export automotive electronic components within Mexico.
Chori
Seeking local plant partner for seat production
Chori plans to start local production of seat fabric in response to increases in production at its Japanese customers in Mexico. The company is now seeking a local plant partner for this initiative. Although the location is yet to be determined, the plant will be used as an export hub to North America.

(Sources: Press releases by each supplier and newspapers)

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