Nissan Expands Mexico Lineup to Build Note Subcompact Car

Nissan Motor Co. (7201), the largest automaker in Mexico, will start domestic production of the Note subcompact and export the cars throughout the Americas.

The five-door model will be the third assembled at the factory in Aguascalientes, Mexico, according to a Jan. 12 statement. Nissan will keep building the cars in China, India and Thailand while using Mexican-made Notes for the Americas, said Maria Eugenia Santiago, a spokeswoman in Mexico City.

Adding the Note underscores Mexico’s auto-making prowess in a year when an industry trade group projects that output may top 3 million for the first time. Production and exports both set records last year, with about 86 percent of the vehicles sent abroad going to the U.S., Canada or elsewhere in Latin America.

“Mexico is on the auto industry’s radar screen, and it’s a critical country for manufacturing,” Guido Vildozo, an auto analyst at researcher IHS, said in a telephone interview from Lexington, Massachusetts. “There’s cheaper labor, there’s logistics, there are free trade agreements.”

Nissan produced more than 683,000 vehicles in Mexico last year, a 13 percent increase from 2011, the Mexican Automobile Industry Association said Jan. 10. Five of the top 10 auto models sold in the nation last year were from Nissan, pushing the company’s local market share to an industry-leading 25 percent, according to the trade group.

‘Strategic Production’

“For Nissan Americas, Mexico represents a strategic production site for the region,” Armando Avila, vice president of manufacturing at the Yokohama, Japan-based automaker’s Mexico unit, said in the statement.

Assembly of the Note will begin in the second quarter, Nissan said in the statement. The automaker is scheduled to unveil the 2014 model tomorrow at the North American International Auto Show in Detroit.

Nissan builds the March hatchback and Versa compact sedan in Aguascalientes, where a $2 billion plant under construction will become its third in Mexico after a scheduled opening by year’s end. The automaker also will produce the NV200 taxi for New York at its factory in Cuernavaca, Mexico.

Mexico’s auto output and exports have almost doubled from their 2009 levels, bolstered by the economic recovery in the U.S. and investments by foreign automakers such as Ford Motor Co. (F), General Motors Co. (GM) and Volkswagen AG (VOW), in addition to Nissan.

Mazda Motor Corp. (7261) said capacity at the Mexican plant it’s building will be 21 percent larger than once planned. The Salamanca, Mexico, factory will make Mazda2 and Mazda3 small cars when it opens in 2014 and be able to produce 230,000 vehicles a year by March 2016, according to a company statement.

Honda Motor Co. is opening an $800 million plant in the nearby city of Celaya. Volkswagen’s luxury carmaker Audi said last year it would build the nation’s first luxury car plant with an investment of $1.3 billion. It will make its Q5 sport- utility vehicle east of Mexico City in the state of Puebla.

To contact the reporter on this story: Brendan Case in Mexico City at bcase4@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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