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Launch of F650 in Escobedo marks beginning of end of Fordrsquos mediumduty production in Mexico
<p> <strong>Launch of F-650 in Escobedo marks beginning of end of Ford&rsquo;s medium-duty production in Mexico.</strong></p>

Mexico Hot Spot in 2012, as Mazda, Audi Move In, Others Look to Expand

Auto makers and suppliers looked to add capacity as Mexico resolved its trade disputes with Brazil and Argentina in 2012.

Highlights of the year’s major events affecting Mexico:

  • Denso announces in January it will build a new plant for heating, ventilation and air-conditioning systems in Guanajuato, the third facility for the supplier in Mexico. Construction of the $57 million facility is to begin in October 2013. Employment is forecast to reach 400 workers by 2015.
     
  • Nissan says its new B-car plant in Aguascalientes, targeted to open in late 2013, will take its direct employment in Mexico to 13,500 people. The new facility’s first-phase capacity is set at 175,000 vehicles annually.

    But the auto maker doesn’t expect to stop there. Reports surface in November CEO Carlos Ghosn believes more North American capacity will be needed, with Mexico emerging as the leading candidate for another new assembly plant.
     
  • Production in February takes a dramatic 24.2% leap to 252,450 units, spurred by a 27.9% increase in builds for export complemented by a 10.8% boost in domestic assemblies.
     
  • Brazil and Mexico reach a roadblock in early March in their discussions over renewing a decade-old free-trade deal. The dispute centers on a 70% increase in automotive exports from Mexico to Brazil in 2011, which Brazil sees as a threat to its own industry.

    Several auto makers announcing or considering new plants in Mexico are counting on using the country as a base to supply both the U.S. and Brazil, and the potential dissolution of the free-trade deal threatens the economics of those plans.

    By midmonth a new pact is struck. Mexico agrees to auto export quotas limiting shipments to Brazil to $1.45 billion the first year and rising to $1.64 billion in year three. It also promises its auto makers will increase use of parts from Brazil over a 5-year period.
     
  • Ford reveals in March it is investing $1.3 billion in its Hermosillo plant to gear up for production of the ’13 Ford Fusion and Lincoln MKZ midsize sedans. The new Fusion also will be built at Ford’s AutoAlliance plant in Flat Rock, MI. The auto maker says the move will create 1,000 new jobs in the Mexican state of Sonora.
     
  • Audi confirms in April it will construct a new plant in San Jose Chiapa, Puebla, to produce Q5 cross/utility vehicles in 2016. Initial plans are to assemble 160,000 vehicles annually.
     
  • Mazda appears to back off plans to ship vehicles from its upcoming new Mexican plant to Brazil following the new trade deal reached between the two countries in March. Reports surfacing in July suggest the auto maker is in discussion with a Brazilian assembler about producing up to 70,000 vehicles at a plant near Sao Paulo for the local market.

    In November, Mazda reaches a deal to supply Toyota with cars from its Mexican facility. Annual volume is expected to total 50,000 units, with production launch in mid-2015. The car reportedly would replace the Yaris in the U.S.
     
  • Ford launches production of its ’12 F-650 pickup in Escobedo in August, but the model is destined to be the last generation of medium-duty trucks the auto maker will build south of the border. Its 4-year labor deal with the United Auto Workers union in the U.S. promises output of medium-duty trucks will be shifted to Avon Lake, OH, beginning in 2015.
     
  • A growing collaboration between Renault-Nissan and Daimler will see a new automatic transmission supplied to Mercedes from the Mexican operations of Nissan subsidiary Jatco, officials reveal in September. Volumes are not disclosed.
     
  • General Motors launches production of its Chevrolet Trax in Mexico in October. The auto maker says it will ship the vehicle to Brazil and Canada, but not the U.S.
     
  • Mexican auto makers, led by Toyota, launch a suit in October aimed at stopping a proposal calling for the country to align its fuel-economy regulations with tougher U.S. standards of 35.5 mpg (6.6 L/100 km) for 2016. The auto makers say the standard is too strict and would increase vehicle prices.
     
  • Brazil denies reports surfacing in October it may raise its new lid on Mexican auto imports by $350 million. “We are not thinking of increasing the quota,” assures Trade Minister Fernando Pimentel.
     
  • Supplier Continental reveals it will add a fifth plant in Mexico, this one to produce short-range radar sensors beginning 2014. At least five auto makers are planning to source components from the plant, the company says, with volume forecast to surpass 1 million units annually soon after startup.
     
  • In November, Mexico and Argentina reach a preliminary deal to resume free trade in the auto sector. The existing trade agreement had been suspended in June, with Argentina placing a 35% tariff on vehicle imports from Mexico and Mexico ending import-duty preferences on vehicles shipped from Argentina.
     
  • As the year winds down, the country is on track for a healthy double-digit gains in both vehicle sales and production. Deliveries rise 11.2% through the first nine months to 700,544 vehicles. Output climbs 12.7% to 2,534,624.

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