General Motors has unveiled a $691-million investment plans to expand its Mexican operations. According to GM Mexico President Ernesto Hernandez, the plans calls for the expansion of GM's Toluca engine plant; construction of a new site in Silao to produce 8-speed transmissions; and an upgrade to its San Luis Potosi plant that will build next-generation transmissions.
Mexico has been tagged by a number of carmakers and analysts as a next largest economy in Latin America, surpassing even Brazil. The reason is clear: Mexico is signatory to several free trade agreements; offers a cheap and well-educated labor force; and is ideally situated just south of the United States.
According to Hernandez, the automotive sector now is one of the pillars of Mexico's national economy, as it accounts for over 20 percent of manufacturing GDP and continues to be a basic industry in "attracting investments to productive sectors of the economy."
He added that GM's investment will increase employment and boost development in Silao, San Luis Potosi and Toluca. The carmaker's expansion in Mexico is expected to result to new jobs in the country, where GM is also employing at total of 15,000 people.
The carmaker builds the Chevrolet Silverado and GMC Sierra pickup trucks in Silao; the Chevrolet Sonic and Captiva, and Cadillac SRX models in Ramos Arizpe; and the Chevrolet Aveo, Trax and Tracker vehicles in San Luis Potosi.
GM boasts of having the second largest vehicle output in Mexico, next to Nissan, according to the Mexican Auto Industry Association. [source: GM]