The Japanese company Nidec plans to invest around US $715 million in the construction of a plant in Mexico that would produce motors for electric vehicles, Nidec’s CEO Shigenobu Nagamori said in an interview with Nikkei, a Japanese news agency.

Since its founding, Nagamori said, Nidec has maintained a policy of local production for local consumption, implying that the new plant would serve the North American market.

The plant wouldn’t be Nidec’s first investment in Mexico. The company already manufactures engines for conventional vehicles in Nuevo León, Tamaulipas, San Luis Potosí, Guanajuato and Querétaro.

Nidec makes traction motors for electric vehicles using a system they call “E-Axle,” which combines a motor, an inverter and a reducer. They can be installed in any vehicle and serve the same function as an engine for gasoline-powered cars. The company already manufactures “E-Axle” motors in China and Europe.

Although it has not yet been announced where Nidec’s plant would be built, construction is expected to begin during or after the next business year starting in April.

With an increasing interest in nearshoring in Mexico, in early November the Economy Ministry announced that 400 companies were seeking to relocate operations from Asia. In September, the Bajío region also reported a boom in construction of industrial parks for the same reason.

Baja California Sur also stands to benefit from the nearshoring trend; 25 Asian companies are looking to relocate to the state because they “see the attraction of being close to the most important market, which is the United States,” Alonso Gutiérrez, the state’s Deputy Economy Secretary, said at the Mar de Cortés Summit over the weekend.

With reports from Reuters and El Heraldo