The UK based engineering group, GKN, is planning to spend $100m over the next three years in Mexico to expand its driveshafts operations, to meet demand from carmakers in the country.
To further support its plan, the company is planning to build a new 28,300m2 precision forge at its Celaya facility in Mexico, with an additional investment of $11.5m.
GKN Driveline division chief executive Andy Smith was quoted by ft.com as saying that the expansion would help it gain exposure to the growth in the US and Mexican car markets.
"Mexico is a very important market in itself: light vehicle production there should rise from 1.7m today to 3m within the next three years. But it also gives us exposure to the US, where sales are strong, and there is still a lot of pent-up demand after people put off buying cars in 2008-09," Smith said.
The new facility, which is third of its kind, is expected allow the company to produce over 15 million forgings per year when fully operational by the end of 2012.
Nissan is building a $2bn plant in Aguascalientes while Honda and Mazda are also building thier plants in Guanajuato.
Audi has already revealed a plan in April to build a plant in the country and Volkswagen has a factory in Puebla, east of Mexico City.
