ZF Sachs Suspension, a division of ZF Friedrichshafen, is spending about USD30 million to increase production capacity, according to local media reports. The investment is going into capacity in El Salto in Jalisco, Mexico and is expected to create between 200 and 300 new jobs. The company already employs 2,000. The company is looking to product to 17 million shock absorbers is 2014, increasing to 30 million in 2018. ZF Sachs says Audi, VW, Mercedes-Benz, Nissan, BMW, Toyota, Honda, Ford GM, and Chrysler are among its customers, with 30% of production exported to US, Germany and Japan.
Separately, Axalta Coating Systems announced a USD10.5 million investment in its Tlalnepantla, Mexico, facility dedicated to producing resins for manufacturing coatings. The investment will expand the capability of the operations center, which is one of three manufacturing locations for the company in Mexico. The facility will adopt manufacturing technology designed to improve operational efficiencies, reduce waste and reduce the company’s environmental footprint.
Significance: Both increases follow planned increases in OEM production capacity, some in all-new plants (Audi, BMW, Mazda, Kia, Honda) in the region and some in expansion of capacity of facilities (Volkswagen, Nissan). ZF Sachs lists most of the companies that have announced production increases as customers. OEM production in Mexico is forecast to exceed that of Brazil by the end of the decade, which is driving tier one supplier investment, as well as concerted effort to push tier two investment. Additionally, ZF Sachs indicates that some production is for export, as well as for supplying the domestic manufacturing needs. This is also consistent with the trend of increasing production in the country, as it is important as an export hub more even than for domestic supply. Axala’s commitment underscores that the new investment follows sustainability and environmental concerns of manufacturing facilities in mature markets.
