The Mexican automotive market -- especially the original equipment market -- is expanding out of necessity. And Michelin North America Inc. is right there with it.
Michelin plans to build a consumer tire plant in León (Guanajuato state), Mexico. It is the company's second Mexican plant; the other is in Querataro, Mexico.
The new plant, located in the center of Mexico, increases the number of Michelin's tire plants in North America to 16 and the number of its production facilities to 21. It also "reaffirms Michelin’s commitment to manufacturing its tires as close as possible to the markets in which they are sold," according to the company.
The construction of the 142,000-square-meter, $510 million plant is expected to begin in second-half 2016. Once completed, the León plant will be ramped up gradually, with the first tires expected to come off the production line in fourth-quarter 2018. During the initial production phase, it is expected to manufacture 4 million to 5 million high performance passenger and light truck tires a year for:
* Michelin original equipment customers with plants in the region;
* the large North American domestic market, which has been enjoying strong growth in recent years.
"Michelin is building this plant to respond both to sharp growth in Mexico's automobile market and to the confidence that the world's largest car manufacturers have put in us," says Jean-Dominique Senard, CEO of Groupe Michelin. "The largest investment approved by (Groupe Michelin) in 2016, the new plant reflects our ability to take advantage of growth opportunities in the dynamic North American market and to make our manufacturing operations more agile by deploying tire ranges that integrate innovative technology."
Most of these high performance tires will be produced for the original equipment segment. The plant's location was chosen because it is just a three-hour drive from the production facilities of 18 large car manufacturers with operations in Mexico. By delivering the tires to its customers faster and more cost effectively, the company says it will reduce its carbon footprint and help it meet its environmental objectives.
"We’re pleased to strengthen our industrial presence in Mexico, thereby being able to satisfy the needs of North American car manufacturers and motorists looking for high-quality tires that are perfectly adapted to their usage conditions," adds Mike Boggs, director of Michelin Mexico.
Michelin has been present in North America since 1950 and currently employs 23,000 people in the U.S., Canada and Mexico. It has the capacity to produce 158.6 million passenger and 32.1 million light truck tires per day in North America, according to the 2016 Modern Tire Dealer Facts Issue.