MANUFACTURING PLANT

Renault-Nissan, Daimler Connect in Mexico

July 30, 2015 by admin Leave a Comment

You can’t buy a new Renault in the United States, but Nissan, Infiniti, Mercedes-Benz and Smart brand models are available.

Nissan (Nissan and Infiniti) and Daimler (Mercedes-Benz and Smart) each have a strong presence in North America on their own. Nevertheless, the two competitors are moving forward with an alliance that will produce new models for the Infiniti and Mercedes-Benz marques by means of a manufacturing plant currently under construction in Aguascalientes, Mexico.

Leaders of the COMPAS consortium are overseeing the Mexican alliance.

COMPAS: In the Right Direction

In 2010, Daimler and Renault-Nissan forged an alliance —COMPAS (Cooperation Manufacturing Plant Aguascalientes) — in an effort to build all-new, next generation compact models for the Mercedes-Benz and Infiniti brands. This week, the 50:50 joint venture was officially launched, with Daimler and Nissan each contributing $500 million to build a $1 billion manufacturing plant. That plant will be constructed alongside an existing Nissan facility in Aguascalientes.

The new manufactory is expected to come on line in 2017 and employ as many as 3,600 people directly by 2020 with room to grow as needed. The first Infiniti-based model will roll out in 2017 followed by the first Mercedes-Benz model in 2018.

New, Entry-Level Models From Mexico

Neither manufacturer has specified what models will be produced, but an Infiniti Q20 or Q30 model is reportedly in the offing. Mercedes-Benz may utilize the facility to begin producing its next generation CLA-Class model line.

COMPAS is overseen by a six-member board composed of three members from each manufacturer.

Armando Avila, Manufacturing VP, Nissan Mexico; Carlos Servin, Finance VP, Nissan North America; and Takehiro Terai, Total Customer Satisfaction VP, Nissan North America, are representing Nissan’s interests. Daimler is represented by Michael Göbel, Head of Production Compact Cars, Mercedes-Benz Cars; Axel Harries, Head of Quality Management, Mercedes-Benz Cars; and Christian Schulz, Head of Controlling, Mercedes-Benz Cars Operations.

“COMPAS is an outstanding example of the global reach of the Renault-Nissan Alliance and Daimler cooperation. Together we are combining the manufacturing expertise of Nissan and Daimler in one production plant in Mexico for the production of next-generation premium compact cars,” said COMPAS CEO Kurosawa. “Aguascalientes was selected as the location for this new plant thanks to the state’s well-established supplier base and Nissan’s track record in highly efficient manufacturing in Mexico for more than three decades,” he added.

Although the two manufacturers will build new models based on the same platform, each brand will inscribe their unique countenance on the vehicles sporting their names. The bones may be similar, but everything else about these models will be different.

Mexico is not the only facility that will build the new models. The companies will collaborate elsewhere, harnessing plants in Europe and China as well.

An Alliance of Convenience

The Renault-Nissan and Daimler partnership falls short of a full-blown alliance whereby each manufacturer takes a share in the other. Nevertheless, it demonstrates that automotive manufacturers can forge confederations to accomplish specific tasks. With both sides contributing to the alliance, development and production costs are shared, leading to greater economies of scale.

Nissan and Daimler Sales

US sales for Nissan are up 4.2 percent through June and are up by 8.3 percent for Infiniti. Mercedes-Benz sales are up 9.4 percent year to date, but Smart sales are down 22 percent. However, the 2016 Smart ForTwo is all new, arrives this fall, and should help bolster Daimler’s niche A-segment brand.

Sales for the entire US market are up 4.4 percent through June 2015 and are on pace to top 17 million units. Softening demand for cars comes as consumers snap up utility vehicles and pickup trucks in greater numbers.

Kia Motors Announces Mexican Plant Venture

August 29, 2014 by admin Leave a Comment

Kia enters the Mexican market in a big way.

The subcompact Kia Rio may find a home in Mexico.

Korean automaker Kia Motors Corporation announced this week that it will build a new manufacturing plant in Nuevo Leon, a state located in northeast Mexico, not far from Texas. Kia’s investment will come in at $US1 billion and will represent the company’s second location in North America.

Kia Motors: On to Mexico

The new plant will join one in West Point, Georgia, currently operating at full capacity. Construction is expected to commence in September with the plant operational by early 2016. Kia Motors executives were in Mexico City to sign the agreement with Enrique Pena Nieto, president of Mexico, among the dignitaries present.

Speaking on behalf of the automaker was Hyoung-Keun (Hank) Lee, Vice Chairman of Kia Motors Corp. Said Lee, “We are committed to producing world-class quality vehicles here in Mexico that feature industry-leading styling and high-tech convenience and safety features that customers have come to expect from Kia, while making significant contributions to both the economic growth of the State of Nuevo León and the future development of the Mexican automotive industry.

Access to Affordable Labor

Annual capacity for the new plant has been set at 300,000 vehicles, pushing the automaker’s global build capacity to 3.37 million units, almost evenly divided between plants in Korea and abroad. The automaker hasn’t announced which models will be built in Mexico, but industry experts have named the Rio subcompact and Forte compact as two strong possibilities. Both models are produced in Korea; Mexico would give Kia the low-cost labor to profitability build cars south of the border.

Kia acquired 53,800,000 square feet (1,235 acres) to build its new plant, leaving ample room for suppliers to set up shop nearby. Although the company hasn’t announced how many people will work at the plant, a labor force of 2,000 to 3,000 individuals is typical for a plant this size. Several thousand more supplier jobs will also be created with the local economy receiving an enormous boost as well.

US Sales: On the Rise

Despite capacity constraints, Kia’s US sales are up 7.2 percent in a market showing a 5 percent boost through July 2014. The automaker’s growth is outpacing its Korean sibling, Hyundai, which is seeing a modest 1 percent increase year-to-date. Hyundai also has a US factory — located in Montgomery, Alabama — and taps Kia to build its Santa Fe crossover in Georgia. Combined US sales for the Hyundai and Kia brands are up by 3.7 percent year-to-date according to Good Car Bad Car.

Building in Mexico not only gives Kia access to low, albeit rapidly rising labor costs, but it also gives the company access to approximately 40 markets with which Mexico has trade agreements. Mexico, along with Canada and the United States, compose the North American Free Trade Association (NAFTA). NAFTA is a trade bloc, what eliminated trade barriers between the three nations and has spurred investment. NAFTA has been criticized by some as American companies move to Mexico to save on labor costs while costing US workers their jobs.

Mexico also will represent a new sales market for Kia, one of the few places in the world that the company has yet to penetrate. The automaker says that the Mexican plant will allow it to strengthen Kia’s “sales presence throughout the entire Central and South America region while freeing up supply from Kias domestic plants to address supply shortage issues in other regions of the world.”

Working With Hyundai

Kia’s growth has come largely through its relationship with Hyundai. The two companies comprise the Hyundai Kia Automobile Group with Hyundai supplying many of the platforms, engines and components used by Kia. Kia utilizes its own body shells and interiors to produce models that are differentiated from Hyundai.

Kia’s best selling model is its Optima sedan followed by the Soul multi-purpose vehicle and Sorento SUV. The Soul and Sportage SUV have accounted for nearly all of Kia’s growth so far this year.

Photo copyright Kia Motors.

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Where Was My Car Manufactured?

August 7, 2014 by admin 2 Comments

The Lincoln MKZ is manufactured in Mexico.

From time to time I am asked about the manufacturing status of a particular make/model. No, not whether the vehicle is still being made rather where it is being assembled.

Some people make a big stink about where a car is built, then quickly realize that a model from a domestic manufacturer may be imported from overseas. They also soon learn that a Japanese or German manufacturer may build a so-called “foreign” model in the United States. What complicates matters further is when the model was also designed in the United States.

NAFTA and globalism have changed the way that consumers look at cars. While local build is sometimes a criteria for some customers, it doesn’t come with the emotional strings that it once had. Let’s take a look at a select group of models and where they are manufactured. The list may surprise you.

1. Lincoln MKZ — The smallest of Lincoln’s sedans is built at the Hermosillo Stamping and Assembly Plant in Mexico. That plant also builds the Ford Fusion.

2. Hyundai Santa Fe — Hyundai either imports its Santa Fe from South Korea or it builds this crossover at its sole US plant in Montgomery, Alabama. Right? Wrong on both counts. Hyundai taps its Kia partner to build the Santa Fe at Kia’s assembly plant in West Point, Georgia. In Alabama, Hyundai builds the Elantra and Sonata sedans.

3. Toyota Avalon — The Toyota Camry is a midsize sedan and the Avalon is its large sedan. The Avalon is based on a stretched version of the Camry’s platform. Both models also offer hybrid variants. The Avalon, like the Camry, is manufactured in the good ‘ole USA at an assembly plant in Georgetown, Kentucky. Both hybrid editions are built there too.

4. BMW X4 — Most automotive enthusiasts know that BMW has a manufacturing plant in South Carolina. What they may not know is that the plant is the exclusive builder for all BMW crossovers, not just the all-new X4. That means if there is an “X” in a BMW model’s name, then the Spartanburg, South Carolina plant is where it was manufactured. These models are also exported to more than 140 countries.

5. Lexus IS — Let’s just get straight to the point: all Lexus models are imported. They are manufactured at various assembly plants in Japan (Tahara, Kyushu and Motomachi), or in the case of the RX, at least some capacity is handled by a plant located in Cambridge, Ontario. That will soon change, however, as Lexus ES production will move to the US in 2015. Toyota Motor announced in 2013 that it would invest $360 million to retool and expand its Georgetown, Kentucky, assembly plant to build the 2016 Lexus ES reports USA Today.

Lexus IS350 F Sport — No Lexus models are manufactured stateside. Yet.

6. Volkswagen Passat — Volkswagen was the first foreign automaker to establish a manufacturing presence in the United States when it completed construction of an assembly plant in Westmoreland, Pennsylvania. That plant was originally owned by Chrysler and eventually built various small models such as the Rabbit and its variants. The plant closed in the late 1980s, but was followed just over two decades later by a new plant in Tennessee. The Chattanooga, Tennessee, plant is the exclusive producer of the North American-spec Volkswagen Passat notes Edmunds.com.

7. Dodge Challenger — There is nothing more American than the Dodge Challenger, right? Unless you are a Canadian. Yes, the Dodge Challenger as well as its platform mates — Chrysler 300, Dodge Charger and Lancia Thema — are built at the Brampton Assembly Plant and Brampton Satellite Stamping Plant in Ontario. Chryslers manufacturing presence in Canada goes back nearly a century.

8. Fiat 500L — There is nothing more that “speaks” Italian than Fiat. Okay, Ferrari and Maserati do likewise. Even so, it would be wrong to assume that every Fiat model is manufactured in Italy. Take the 500L as one example: every model you see on the roads here is built at the Kragujevac plant in Serbia. Serbia was once part of Yugoslavia and is the exclusive producer of this compact car. Oh, by the way, the Fiat 500L is not a stretched version of the 500. Fiat uses a separate platform to build the larger model.

2014 Fiat 500L Trekking — Italy cannot claim manufacturing responsibility for this Fiat.

9. Honda Accord — Honda has the distinction of being the first Japanese car manufacturer to establish a manufacturing plant in the United States. In 1981, Honda opened an assembly plant in Marysville, Ohio. That plant continues to make the Honda Accord today. Honda claims that 94 percent of Honda and Acura vehicles sold in United States are manufactured in North America. Honda now exports some of its production from the US to overseas markets.

10. Chevrolet Silverado — Baseball, apple pie and Chevrolet. The old advertising adage for Chevrolet is fondly recalled by many. However, most people are aware that some GM models, including certain Chevrolets, are not manufactured in the United States or in Canada. One such model is the Silverado, This full-size pickup truck and twin to the GMC Sierra is manufactured in Silao, Mexico, or in Fort Wayne, Indiana. A third plant, located in Flint, Michigan, builds a heavy-duty line according to MLive.

2014 GMC Sierra Denali — Your GMC Sierra may or may not be manufactured in the USA.

Manufactured in America or Not?

Does it matter anymore where a vehicle is manufactured? The concern for many in the past was the loss of American jobs. These days, an assembly plant located in the southern United States may not be unionized, but will typically employ 2,000 to 3,000 or more direct jobs and produce more than 10,000 indirect positions through suppliers and local businesses that have also benefited from the presence of a local manufacturing plant.

Beyond Canada and Mexico which along with United States compose the three NAFTA countries, imported vehicles provide jobs for dockworkers, dealer sales staff as well as for upfitters tasked with helping finish these models to comply with US regulations period.

See Also — Highlights of July 2014 Auto Sales

Rumors Swirl as GM Announces Tenn. Plant Expansion

August 12, 2013 by admin 1 Comment

Ah, rumors. The auto industry has its share of them, largely fed by the vague remarks of corporate managers and automotive journalists that attempt to parse that information.

Rumors have been swirling for the past week ever since GM announced that it was investing an additional $167 million into its Spring Hill, Tenn., manufacturing plant, bringing its total pledge for the two projects to $350 million. The investment will result in the retention or creation of up to 1,800 jobs at a facility that was opened in 1990.

Saturn Manufacturing Plant

Map of Tennessee highlighting Williamson County — Map of Tenn. highlighting Williamson Co., location of GM’s Spring Hill plant (Photo credit: Wikipedia)

Spring Hill was at one time operated solely as the assembly plant for the Saturn company, a brand that GM dissolved 2010. Saturn was originally marketed as a “different kind of car company,” before it eventually was pulled into the GM fold. Saturn, along with Oldsmobile, Pontiac, Saab and Hummer are no more, but the Spring Hill plant has survived.

That plant currently builds the Chevrolet Equinox and the GMC Terrain, five-passenger crossover utility vehicles that have sold well for GM. Both models offer four and six-cylinder engines and are sold in front- and all-wheel-drive configurations. Updates for each are due in about two years.

GM Midsize Vehicles Planned

Both investments are for mid-size vehicles, but GM has declined to identify what these vehicles are. Instead, the company says that the “timing and product specifications for both programs will be shared closer to start-of-production.” Typically vague, but that’s more information than what many of its competitors routinely serve up.

Naturally, the lack of concrete information has spawned rumors including the possibility that GM would bring the Chevrolet TrailBlazer, an SUV it builds for other markets, to the US. That vehicle shares the same platform as the upcoming Chevrolet Colorado, but GM has said that it has no intention of bringing it to the US.

Buick and Cadillac Products?

Instead, Auto Trends believes that the vehicles that will be built in Spring Hill will fill holes in Buick’s and Cadillac’s line ups. Buick has the small Encore and the larger Enclave in its crossover arsenal and needs to have a mid-size model to fill that hole.

Cadillac, too, has some product gaps with its SRX crossover and Escalade SUV its current SUV offerings. The Cadillac could be based on the Buick’s platform with unique sheetmetal for the luxury model. In any case, Cadillac is due for two models to fill the hole between SRX and Escalade with perhaps an Enclave-derived model entering the line up at some point too. On a side note, Cadillac is due for 10 new or updated models over the next two years.

Flex Assembly Line

Spring Hill offers some advantages that other GM plants do not have. Besides being relatively new, its flexible assembly line makes it possible to build a variety of vehicles on it for a range of platforms. Its both an innovative and cost-saving change that manufacturers have been rushing to adopt in recent years in a bid to contain costs and to adjust quickly as consumer demand shifts. Yes, Japanese manufacturers have been doing this for years and Volkswagen is also another proponent.

Pouring more money into domestic manufacturing reflects positively on General Motors and is in line with what the Ford Motor Company and the Chrysler Group are doing as well. Tennessee is outside of the rust belt area too, a location that makes it possible for GM to expand further if it desires to do so down the line. That expansion will no doubt have much to do with the company’s market share, with a larger slice necessitating additional build capacity.