Three auto supplier companies are set to start operations in Mexico's Nuevo Leon state, according to local news source Reforma, citing Angel Aristeo Gonzalez, secretary of economic development for the region. The report says that three South Korean suppliers are about to start operations in the region, supporting a new Kia Motors plant. The three suppliers are Myunghwa, which is investing USD33 million; Hanwha, investing USD20 million; and Daeha, investing USD15 million. Additionally, the report states that Mexican plastic pipes producer Fimex will start operations in the Monterrey Technology Park by the end of October, while Amko Solara, an LED company, has opened offices in the park as well.
Significance: Kia confirmed its intention to build a new plant in Mexico in August 2014, later confirming that the Forte will be among the models going into production in 2016. Along with the suppliers mentioned in this latest report, Hyundai Mobis earlier this year announced plans to build a facility to support the new Kia plant. IHS Automotive forecasts the new facility will build about 256,000 units in 2017, accounting for 6.3% of output from auto plants in Mexico that year. The facility's production is expected to contract somewhat in 2018 and settle closer to 240,000 units per annum in 2019 and 2020. We forecast production of the Kia Rio and the Hyundai Accent will begin at the facility in 2017, along with production of the Forte. The new Hyundai-Kia plant is contributing to forecasts that vehicle production in Mexico will grow to 4.8 million units in 2020, compared with 3.2 million units in 2014. While General Motors, Ford, Nissan, and Volkswagen have all produced vehicles in Mexico for decades, Kia is joining other relative newcomers Honda, Mazda, BMW, and a Daimler/Infiniti joint project.
