Nissan Mexicana is looking to decrease its reliance on imported parts and materials to protect against currency fluctuations, reports American Metal Market magazine, citing Nissan's Mexican subsidiary's director of exports, institutional relations and international affairs, Jorge Vallego. Vallego reportedly said, "[Foreign exchange] is killing us − especially buying raw materials from abroad, if you're buying plastic, steel, engineering processes, safety processes from outside Mexico − because we are paying in dollars. We need to develop more raw material purchasing positions from everywhere so we don't need to rely on imports from the US or China or Korea, especially in steel, considering a vehicle is made 70 to 80% from steel. We need to localise all the suppliers and we need to be paying in pesos." The position has reportedly led to Nissan Mexicana establishing a goal of sourcing 90% of its tier one content from local industry in 2016.
Significance: According to the IHS Automotive production forecast, Nissan will see Mexican production increase from 675,850 units in 2012 to about 842,000 units in 2016, although this will settle back to around 800,000 units in 2019, not including the joint Mercedes-Infiniti project. The country has seen automotive investment increase over the past several years, with plants from BMW and Ford due to come online late in the decade. Light-vehicle output in Mexico is forecasted to reach 4.9 million units in 2020, an encouraging development for Nissan's efforts to push for increased localisation. Renault/Nissan and General Motors remain Mexico's largest automakers, with the two companies out-producing each other at various times. The increased investment from other automakers, however, means that Renault/Nissan's share of production will decline from 25% in 2013 to 15% in 2020, even as the manufacturer increases its production rates.
