Mexico’s burgeoning automotive industry will, once again, be receiving billions of dollars in new OEM investment as the country climbs the world ranks of national auto production to seventh largest. As new OEMs establish themselves and existing OEMs expand operations, opportunities for paint and coatings manufacturers will grow markedly.

By 2020, Mexico will increase its current automotive production by 60 percent to 4.5 million vehicles per year, or one in every four vehicles in North America, up from one in six in 2012, according to research analyst IHS Automotive. As of the end of the first half of this year, Mexican automotive production exceeded that of Brazil. Among the major automotive coatings companies that will benefit from this boom are PPG, Axalta and Sherwin-Williams.

OEMs Come in New Wave
Among major OEMs who recently announced plans for new factories in Mexico is BMW, which announced in July a $1 billion investment in San Luis Potosi with capacity of approximately 150,000 vehicles per year. Reports also circulated in July that Kia is considering a new manufacturing plant in Monterrey with an annual capacity of some 300,000 vehicles. These followed an announcement in June that a joint venture between Renault-Nissan and Daimler would involve a $1.36 billion investment in Aguascalientes to build vehicles for the Infiniti and Mercedes-Benz lines.

Last year, Chrysler invested $1.23 billion in Saltillo, and several billion worth of new Mexico investments also were announced by Honda, Mazda and Volkswagen. Analysts say that it is difficult to maintain a current count of planned and ongoing investments in Mexico’s automotive industry now.

Coatings Makers Also Boost Investments

Among several automotive coatings makers boosting production in Mexico is Brazil’s Weg, which announced a five-year plan in June to invest $210 million to expand in Mexico, of which $100 million will be allocated to the Huehuetoca site. The company serves the automotive, industrial and white goods segments.

In August, Axalta announced a commitment to invest $10.5 million in Tlalnepantla to expand capacity to produce resins used in transportation coatings. Tlalnepantla is one of three manufacturing centers for Axalta in Mexico, and headquarters of the company’s businesses in Latin America.

“This investment underscores the company’s commitment to support our continued growth in Mexico with locally produced coatings,” explained Jorge Cossio, president, Latin America for Axalta, in the announcement. “The investment will support Axalta customers in the light vehicle OEM and commercial transportation markets. In addition to manufacturing products for Mexico, the expansion also allows Axalta to better serve the broader Americas market,” he said.

In April, PPG Industries announced plans to invest more than $27 million in its San Juan del Rio.

Similarly, Dürr announced plans last year to expand its paint equipment production capacities with a new facility in Querétaro that would boost their Mexico production by 50 percent. The company will supply the new Audi paint line, an April announcement indicated.