Koito Manufacturing has decided to build a production site in Mexico where Japanese automakers are opening new plants one after another.

Japan's largest automotive lamp manufacturer will decide this summer where to locate the plant, the Nikkei reported. Expected to take around 10 months to construct, the facility will be completed well before automakers such as Nissan and Mazda, increase Mexican production in early 2014.

The new plant is expected to be one of Koito's major production sites, turning out lamps for several hundred thousand vehicles annually.

A typical plant that can make lamps for 500,000 vehicles annually costs around JPY5bn to build. By simplifying the building and using inexpensive equipment, the company plans to keep capital spending to around half what most comparable plants cost.

Koito will be the first Japanese automotive lamp manufacturer with a factory in Mexico. Given that several Japanese automakers plan to use Mexico as an export base to North America, the lamp manufacturer expects demand to increase. The country could also become an export base for South America down the road.