Bloomberg: Automakers Spur $3 Billion Boom for Made-in-Mexico Steel
04/17/2013 - Mexico’s auto production has almost doubled since 2009. Now its steel industry is trying to catch up by spending almost US$3 billion on new and improved factories, Bloomberg reports.
Mexico’s auto production has almost doubled since 2009. Now its steel industry is trying to catch up by spending almost US$3 billion on new and improved factories, Bloomberg reports.
“Auto exports are going to be the new oil for the Mexican economy,” Marco Oviedo, chief economist of Barclays Plc in Mexico, said in a telephone interview from Mexico City.
Mexico has become a magnet for automakers seeking low labor-cost output with access to North and South American markets and other regions through the nation’s trade agreements with more than 40 countries.
Steelmaker Altos Hornos de Mexico SA, known as Ahmsa, has almost completed a US$2.3 billion expansion designed partly to supply automakers. Ternium SA and Nippon Steel & Sumitomo Metal Corp. are teaming up on a $330 million investment to finish rust-resistant steel, and South Korea’s Posco is spending US$300 million to more than double capacity for similar products.
Further growth is likely: The Mexican Automobile Industry Association predicts output will climb almost 40% to 4 million vehicles in 2017 as Nissan Motor Co., Honda Motor Co., Mazda Motor Corp. and Volkswagen AG’s Audi unit build factories that join long-standing plants for U.S. carmakers General Motors Co. and Ford Motor Co.
Mexico has become a magnet for automakers seeking low labor-cost output with access to North and South American markets and other regions through the nation’s trade agreements with more than 40 countries. In some cases, Japanese automakers were taking advantage of the yen’s strength against the dollar at the time they announced their investments…
