Yokohama considering US, Mexico for new plant

Mexico City – Yokohama Rubber Co. Ltd is closer to announcing where it will build a new consumer tire plant in North America—either in the U.S. or Mexico.

“I expect a decision sometime this year,” said Humberto Gomez, managing director of Yokohama Tire Mexico S. de R.L. de C.V.

Gomez said Yokohama already has decided to increase its production capacity in the North American Free Trade Agreement region.

“The (vehicle manufacturing) OEMs are the trigger,” he added, referring to a 2006 Yokohama plan to double its original equipment sales globally by 2020.

Mexico – where a dozen major light vehicle companies either have assembly plants or are in the process of building one – is under consideration for the new plant because it is on target to be assembling 5 million cars a year by the end of the decade. The country is the world’s seventh largest auto producer.

In early 2015, president Gary Nash said Yokohama was studying the feasibility of building a tire plant in Mexico, adding that the study was “at the beginning stages.”

Yokohama Tire Mexico officially began importing consumer, commercial and off-the-road tires into Mexico in May 2013. Since then its sales have grown by “close to 500 percent,” Gomez said.

“We are very happy. The market is very challenging, but fortunately the high end of the market is looking for Yokohama tires. We are a late entry but as somebody said, it’s better late than later.”

Michelin recently disclosed it is planning to build a $510 million tire plant in the state of Guanajuato, north-central Mexico. Production at the 1.58 million-sq.-ft. plant is expected to start in late 2018, with a capacity initially of 4 million to 5 million tires a year. The expected employment was not disclosed.

Elsewhere, Goodyear has begun to build its $550 million tire factory in San Luis Potosi, 120 miles north of the city of Guanajuato. Production there is scheduled to start by mid-2017.

Pirelli Tyre SpA broke ground in June on a $200 million expansion of tire capacity at its 4-year-old car and light truck tire plant in Silao, also in Mexico’s Guanajuato state.

Production at the plant is scheduled to begin in the second quarter of 2017, Pirelli said, with an initial annual capacity of 2.5 million tires.

Pirelli said the new plant strengthens Pirelli’s position in Mexico and its growth at a worldwide level, and will increase its market share by meeting the requirements of export and domestic customers.

The expansion will bolster the Silao plant’s focus on the premium segment, Pirelli said, with production of high- and ultra-high-performance tires for cars and sport utility vehicles, for the NAFTA region markets.

The tire maker’s first plant at Silao covers more than 1.4 million square feet with an annual output of around 3 million tires last year and plans to grow to 5 million tires.

With this new investment, the work force will be increased by 400 employees to more than 1,800, not including 400 ancillary workers.

Bridgestone is adding capacity at its plant in the state of Morelos, which borders on Mexico City to the south.