Crain News Service report
LEON, Mexico — Group Michelin has selected a site in León, in Mexico's Guanajuato state, for a $510 million car and light truck tire plant it said is in response both to “sharp growth in Mexico's automobile market and to the confidence that the world's largest car manufacturers have put in us.”
The tire maker said it expects production at the 1.58 million-sq.-ft. structure to start in late 2018, with a capacity initially of 4 million to 5 million tires a year and approximately 1,000 employees. The company said 80 percent of the plant's output will be tires with 18-inch rim diameters or larger.
Michelin's announcement follows by several months a report by Reuters News Agency that Michelin was planning to build a factory in central Mexico. Ground-breaking is scheduled for Aug. 22 (See separate story).
Michelin said the location reflects its “commitment to producing its tires as close as possible to the markets in which they are sold.” The plant's location is within a three-hour drive of the production facilities of 18 large car manufacturers with operations in Mexico.
Leon is a city of 1.2 million inhabitants about 250 miles northwest of Mexico City and 140 miles east of Guadalajara.
“The new plant reflects our ability to take advantage of growth opportunities in the dynamic North American market,” Michelin CEO Jean-Dominique Senard, “and to make our manufacturing operations more agile by deploying tire ranges that integrate innovative technology.”
Michelin noted most of the high-performance tires to be made at the plant will be for the OE segment. These short distances from the plant to OE assembly plants mean that the tires will be delivered to Michelin's customers faster and more cost effectively, thereby reducing the Group's carbon footprint and helping it to meet its environmental objectives,” Michelin said.
The plant will be Michelin's 21st production site in North America and 69th worldwide, including a plant in Queretaro, Mexico, the company opened originally in 1987 and then reopened in 2002 after a 20-month business hiatus.