Honda de Mexico (HDM), the Mexican arm of Japanese carmaker Honda, has begun the construction of a new transmission plant in Celaya, near the City of Guanajuato (Mexico), the company said in a press release. The transmission plant is located adjacent to the company’s new auto plant which is scheduled to begin mass production of the 2015 Honda Fit early next year. With an initial investment of USD470m, the transmission plant will begin manufacturing continuously variable transmissions (CVTs) in the second half of 2015 with an initial annual production capacity of 350,000 units. The CVT to be produced at the plant are part of Honda's Earth Dreams™ Technology series which is both fuel efficient and sporty.
Significance: Establishing a CVT manufacturing base in the same location as the new USD800m automobile plant will help HDM achieve a highly efficient production structure that maximizes local content in Mexico and the rest of North America. In addition to supporting Honda’s Mexican auto production, the plant will cater to other plants outside the country, especially in the US. The Japanese automaker aims to more than double annual output of CVTs produced in Celaya to approximately 700,000 annually in the coming years. The Celaya plant is Honda’s third automotive transmission plant in North America. Along with transmission plants in Ohio (US) and Georgia (US), the Celaya plant will help bump Honda's North American annual transmission production from about 1.37 million currently to more than 1.7 million units in 2016, and to more than two million units when the Mexican plant reaches full capacity. In the past three years, the automaker has announced investments in North America totaling nearly USD2.7bn, including USD1.27bn for the new plants in Celaya. Mexico has been attracting billions of dollars in automotive investment for the past many years, particularly from Japanese automakers such as Toyota and Honda. The country’s lower production costs, trade agreements with the US, Latin America and the European Union make it an appealing manufacturing base for global automakers.
