GM Mexico president Ernesto Hernandez announces the additional $3.6m spend at the Mexican presidents residence

GM Mexico president Ernesto Hernandez announces the additional $3.6m spend at the Mexican president's residence

General Motors said it would spend an additional US$3.6bn in Mexico to 2018, primarily to modernise and expand its manufacturing factories in Toluca, Ramos Arizpe, Silao and San Luis Potosi.

Ernesto Hernandez, president of General Motors de Mexico, Central America and the Caribbean, said the company was confident the necessary economic conditions existed to create up to 5,600 new jobs, which would also allow the creation of "nearly 40,000 additional places in related industries,".

The additional spending comes on top of $1.4bn already invested in the last two years.

Speaking at the presidential residence of Los Pinos in the presence of Mexican president Enrique Peña Nieto, Hernandez said this new spend would double production of engines, transmissions and vehicles and consolidate General Motors' position as the country's top vehicle exporter.

GM has operated in Mexico for 79 years and has four complexes in the states of Coahuila, San Luis Potosi, Mexico and Guanajuato with a total of 14 production plants.

The automaker employs about 15,000 people currently and supports another 105,000 in the supply chain and related industries.

In 2013, the automaker made 890,000 engines, 1.2m transmissions and 647,000 vehicles of which about 80% were exported.

Hernandez said the value of purchases made from local suppliers would exceed $14bn this year.

General Motors de Mexico has an engineering centre in Toluca where around 800 specialist engineers develop interiors, electrical systems and thermal systems.

Local reports said, including GM's announcement, the total investment announced by the Mexican auto industry during the first two years of Pena Nieto's presidency was $19bn.

Mexico is now the seventh largest vehicle producer in the world, up from eighth largest in 2013.

From January to November of 2014, auto production in Mexico grew 8.7% from the same period in the previous year and exports rose 8.2%, according to reports citing data from the Mexican Automotive Industry Association.

In the same 11 month period last year, GM's production in Mexico grew 5% while exports increased 5.6%.