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Mexico and the U.S. favored for next major automotive plant expansions

Three vehicle manufacturers recently announced a new plant and a major plant expansion in North America. On June 26, the Renault-Nissan Alliance and Daimler announced jointly that their companies have agree to establish a 50-50 joint venture, the business entity that will oversee construction and operation of the new plant in Aguascalientes in North-Central Mexico. The new plant will be built in the immediate vicinity of an already existing Nissan plant and will have an annual capacity of 300,000 vehicles when fully ramped up.

Clare Goldsberry

June 30, 2014

3 Min Read
Mexico and the U.S. favored for next major automotive plant expansions

Three vehicle manufacturers recently announced a new plant and a major plant expansion in North America. On June 26, the Renault-Nissan Alliance and Daimler announced jointly that their companies have agree to establish a 50-50 joint venture, the business entity that will oversee construction and operation of the new plant in Aguascalientes in North-Central Mexico. The new plant will be built in the immediate vicinity of an already existing Nissan plant and will have an annual capacity of 300,000 vehicles when fully ramped up.

Start of production is planned for 2017 with Infiniti models. The production of Mercedes-Benz brand vehicles will follow in 2018. Diamler and Nissan will share the total investment cost for Aguascalientes of approximately 1 billion euro. The companies will add almost 5,700 jobs (including engineering, line workers and support staff) by the time the plant reaches full capacity, expected in 2021. In addition, a high localization rate will significantly increase the Mexican supply base.

Renault-Nissan Alliance and Daimler AG expanding their cooperation with new plant in Mexico.

Carlos Ghosn, chairman and CEO of the Renault-Nissan Alliance, said in a statement, "Joint development of compact premium behicles and joint production in Aguascalientes together represent one of the largest projects between the Renault-Nissan Alliance and Daimler.

Dieter Zetsche, chairman of the board of management of Daimler AG and Head of Mercedes-Benz Cars, remarked, "In Aguascalientes, we will take our successful partnership to the next level by combining the skills of our two companies Daimler and Nissan in one production plant. Just over four years after the cooperation was founded, the decision for the new plant in Mexico is a major milestone."

Nissan has been producing vehicles in Aguascalientes since 1992, and the plant has expanded significantly just in the past year. In November, Nissan opened the first state of a $2 billion manufacturing complex in Aguascalientes. This increased Nissan's total capacity in Mexico to more than 850,000 vehicles annually.

Mexico is already an important market for Daimler. The company has production plants for trucks and buses in Saltillo, Santiago Tianguistenco and Garcia, a parts distribution center in San Luis Potosi and a remanufacturing plant in Toluca. For passenger cars Daimler has a pre-delivery-inspection and training center.

The French-Japanese-German industrial cooperation of Daimler and the Renault-Nissan Alliance began in April 2010, with three "pillar projects" primarily focused on Europe. Since then, the portfolio has increased to 12 significant projects, including major initiatives from the Americas to Japan.

The day prior to this announcement, Infiniti and Daimler launched production of four-cylinder gasoline engines in Decherd, TN, USA. With an annual production capacity of 250,000 units, the Decherd facility produces engines for use in the Mercedes-Benz C-Class and in the Infiniti Q50.

Volvo expands Virginia plant

In another announcement Volvo unveiled plans for a $69 million improvement at its 1.6 million sq-ft New River Valley (Dublin, Virginia) truck assembly plant that is sited on 300 acres. The New River Valley truck assembly plant is the largest Volvo truck manufacturing facility in the world, according to Volvo's information. The improvements will include the addition of state-of-the-art equipment, process and a plant redesign. The New River Valley assembly plant produces all the Volvo trucks sold in North America.

About the Author(s)

Clare Goldsberry

Until she retired in September 2021, Clare Goldsberry reported on the plastics industry for more than 30 years. In addition to the 10,000+ articles she has written, by her own estimation, she is the author of several books, including The Business of Injection Molding: How to succeed as a custom molder and Purchasing Injection Molds: A buyers guide. Goldsberry is a member of the Plastics Pioneers Association. She reflected on her long career in "Time to Say Good-Bye."

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