South Korean-based Grupo Hyundai has firmed up its commitment to Mexico with the construction of two new distribution centers for Hyundai and Kia vehicles.
Hyundai Mobis, the parts and service arm for Hyundai Motor Company and Kia Motors, invested nearly half a billion dollars in the construction of the two facilities, located in Nuevo León and México state.
Each is 14,000 square meters in size and has a storage capacity of close to 1 million individual automotive parts.
The new facilities will offer a prompt response time to requests for parts from the 85 Kia and 56 Hyundai dealerships in Mexico.
Kia Motors México after sales manager Carlos Enrique Ayón said dealerships will only have to wait up to three days for parts, a key element in customer service.
He added that auto parts for the Kia Forte and Rio models will also be exported from the Nuevo León distribution center to markets where those vehicles are sold, including the United States.
The US $450-million investment comes at a time when growth in the automotive industry has slowed due to uncertainty created by the renegotiation of the North American Free Trade Agreement (NAFTA) and protectionist threats by the United States.
The Mexican auto industry is closely tied to that country’s market. During 2016, 3.4 million vehicles were manufactured in Mexico, 80% of which were exported to the U.S.
During an announcement Tuesday about the new distribution centers, Kia México CEO Horacio Chávez Reza also spoke about a new program called Safety Parts, through which vehicle owners who are victims of auto parts theft can receive discounts of up to 60%.
Parts thefts are the most common in Mexico City and Puebla, where exterior mirrors are the most popular part among thieves.
Chávez said that despite a 1.1% decline in new vehicle sales in Mexico, Kia expects to sell 80,000 units this year, representing year-on-year growth of 38%.