Automotive industry: Honda opens second plant in Mexico

Company seeking major foothold in North American markets.

CELAYA:

Honda unveiled a second factory in Mexico on Friday, seeking to capitalise on the nation’s rising power in the sector and strengthen the Japanese car giant’s foothold in North America.

The $800-million plant in Celaya, in the central state of Guanajuato, will churn out 200,000 units per year, contributing to Mexico’s race to beat Canada and Japan as the top car exporter to the US.

For the company, producing the Honda Fit hatchback and a yet-to-be-named compact-sport utility vehicle in Mexico will allow the company to expand its presence in the Mexican and US markets.

Latin America’s second-biggest economy has become an increasingly favoured destination for car makers thanks to its lower wages, skilled workforce and participation in a raft of free-trade pacts.

“We have great expectations for growth in the US market as well as the Mexican market,” Honda Chief Executive Takanobu Ito told reporters, adding that Mexico has good growth potential for small cars.

“In addition to having the North American Free Trade Agreement (Nafta), Mexico has free-trade deals with several regions in the world, including Japan and Europe,” he said through an interpreter.

Mexican President Enrique Pena Nieto was on hand to unveil the sprawling factory, which will have 3,200 workers, alongside state officials and Honda executives, including Ito.

Mexico is now the world’s eighth-biggest car maker and the number four exporter after Germany, South Korea and Japan, according to industry figures.

Published in The Express Tribune, February 23^rd, 2014.

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