INSIGHT-RPT-Mexico drives North American auto investment, challenges China

Mon Oct 21, 2013 6:59am EDT
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* Foreign automakers doing most of the new spending

* Audi, BMW and Daimler among the newcomers

* Detroit 3 have no short-term plans to boost vehicle output

By Paul Lienert

DETROIT, Oct 20 (Reuters) - The Mexican auto industry is about to go on a $10 billion factory building spree, illustrating the nation's rising economic challenge to rivals from the United States to China.

Japanese and German auto manufacturers are spearheading the drive, say parts suppliers and researchers who see more auto factories built south of the border than in the United States between now and the end of the decade.

The United States will consume the vast majority of the new cars, but Mexico's domestic market has rebounded from a long slump, and in a sign of Mexico's growing global role, auto exports outside of North America will rise faster than those to the United States.

BMW AG, Toyota Motor Corp and Daimler AG's Mercedes-Benz are expected to announce at least $2 billion of deals in the next year or two, according to supplier and other industry sources. That's on top of nearly $6 billion in announced plants by Nissan Motor Co, Honda Motor Co, Mazda Motor Corp and Volkswagen AG .   Continued...