German tire manufacturing giant Continental AG announced it will open a new hydraulic hose factory in Aguascalientes’ Vesta Park, with an investment of US $90 million.

Construction on the plant will start in mid-2024, and the site will begin operations in the second half of 2025, according to company representatives. The state government predicts that it will generate 200 direct jobs and generate significant revenue for the economy.

“This will be Continental’s second plant in Aguascalientes,” Marco Galluzi, Continental’s managing director in Mexico, posted on LinkedIn. “We continue to grow and bet on Mexico; in this country, the company employs around 24,000 people in 12 states.”

In a post on social media service X, the Aguascalientes state government said that Continental’s decision to invest further in Aguascalientes was testament to the state’s “security, good business environment and the labor force of our people.” 

Continental’s representatives echoed this praise of the central Mexican state. 

“From our experience in Aguascalientes, we know that we have the right talent to meet the requirements of a high-tech plant like this,” Galluzi said. “We also have a progressive and attractive environment with safety and a high quality of life.”

The new plant will use solar panels and recycled water. It will supply hoses to various key industries, including construction, energy, agriculture and automotive, taking advantage of Aguascalientes’ central location.

“We are a strategic logistics point in the American continent,” said Aguascalientes governor María Teresa Jiménez Esquivel. “We have a road system that connects us with the main ports of the Atlantic and the Pacific, as well as air connectivity.”

Central Mexico is one of the regional hubs of the nearshoring boom, due both to its location and its abundance of engineering and technical service providers, as U.S. and Asian manufacturers seek to relocate manufacturing operations to the country.

“Mexico is prepared to become a leader in the manufacturing sector, with a different production and supply structure,” said Sergio Pérez Castilleja, an executive at global real estate firm Newmark earlier this week. “We are ready for it.” 

With reports from Mexico Industry and El Universal