Thursday, June 13, 2024

German auto parts maker to invest US $72 million in San Luis Potosí

The German auto parts manufacturer Continental will invest US $72.2 million in one of its four San Luis Potosí plants, expanding it to increase manufacturing space and expand and modernize storage. The enlargement will create 350 new jobs.

The project, expected to be concluded by October 2022, will add 20,000 square meters to the plant, an almost doubling of its current size. The company will also build a warehouse in which the management of product will be fully automated, officials said.

“The decision to locate the manufacturing of these high-technology components in our San Luis Potosí plant is a strong signal of Continental’s confidence in Mexico, and especially the region,” said Victor Hernández, the plant’s director.

Company officials said that part of the aim of the expansion is to create a manufacturing plant that will be “first in its class in Mexico,” particularly in the production of hydraulic brakes, and will be competitive in the industry worldwide.

It appears to indicate that Continental is betting on a better year for auto manufacturing in 2021 than last year, when production and sales to the U.S. dropped 20%, according to the National Institute of Statistics and Geography (INEGI). The U.S. is the Mexican auto manufacturing industry’s biggest customer, and about 82% of Mexican-made auto parts get shipped north of the border.

In 2021, the Mexican Association for the Automotive Industry is predicting a 12% uptick in the production, exportation and sales of vehicles this year, despite an 8.5% contraction of the Mexican economy in 2020, the worst in 90 years, and forecasts by the International Monetary Fund and the World Bank predicting that GDP in 2021 won’t bounce back any higher than 4.3%.

Continental employs about 25,000 people in 13 states. Its four manufacturing plants in San Luis Potosí, combined with its financial center in that city, currently employ over 3,000.

Sources: Informador (sp)

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