Michelin resurrects Mexico tyre production ambitions

According to reports, Michelin intends to erect a new passenger car and light truck tyre factory in Mexico. Citing information from “documents” and an e-mailed statement, Reuters writes that this plant would initially have an annual capacity to produce 5 million tyres, a number that could be doubled by around 2020 should market conditions favour growth. The facility will be located in the state of Guanajuato and be ready to enter production in 2017.

Michelin first announced it had chosen Guanajuato as the location for its second factory in Mexico as far back as 2007, however the following year it dropped plans to build there following a decline in the company’s North American sales. The story is different today – in a recent investors’ document, Michelin reported “robust” North American demand for passenger car tyres, with original equipment and replacement market sales both up nine per cent year-on-year in the first two months of 2016. Reuters writes that the proposed Guanajuato plant will primarily manufacture tyres for the North American market, including OEM customers based in Mexico, however it will also sell some output in Europe and Asia.

Around 70 per cent of Mexico’s automotive industry is situated in Guanajuato. Last year both Ford and Toyota announced they would build facilities within the state, thereby joining the likes of GM, Honda, Mazda and Volkswagen, who already operate there.

Pirelli inaugurated production at its tyre factory in Guanajuato almost four years ago and is now expanding the facility on the site where Michelin originally intended to build its factory. This expansion work is expected to be complete in 2017 and will give the plant a 5.5 million tyre per year capacity.

Michelin already operates one factory in Mexico, having opened a truck and car tyre manufacturing facility in the state of Queretaro in 2002. Bridgestone is also present within the country and intends to expand its plant in Morelos, while last year Goodyear said it would invest between US$500 million and $550 million to erect a factory in San Luis Potosí; this will begin production in mid-2017 and have a capacity of around 6 million consumer tyres a year. In addition, Yokohama is allegedly considering setting up production in Mexico.