Michelin plans to build a factory in central Mexico to manufacture high-end tyres for passenger cars and light trucks.
The first tyres are expected to come off the production line in fourth quarter 2018. The new plant in Leen (Guanajuato state) is the group's 21st in North America and 69th worldwide. Its location reflects Michelin's commitment to producing its tyres as close as possible to the markets in which they are sold.
The construction of the 142,000 square metre plant, which will cost EUR450m (US$510m), is expected to begin in second half 2016. Once completed, the Leon plant will be ramped up gradually. During the initial production phase, it is expected to manufacture 4m to 5m tyres a year for Michelin customers with plants in the region as well as for the large North-American domestic market which has been enjoying strong growth in recent years.
"Michelin is building this plant to respond 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 largest investment approved by the group in 2016, the new plant reflects our ability to take advantage of growth opportunities in the dynamic North American market and to make our manufacturing operations more agile by deploying tyre ranges that integrate innovative technology,'' said Jean-Dominique Senard, chief executive officer of the Michelin Group.
Most of these high-performance tyres will be produced for the original equipment segment. The plant's location was chosen because it is just a three hour drive from the factories of 18 large car manufacturers in Mexico. These short distances mean that the tyres will be delivered faster and more cost effectively, reducing the group's carbon footprint and helping it to meet its environmental objectives.
Michelin has been in North America since 1950 and currently employs 23,000 people in the US, Canada and Mexico.