Goodyear Tire & Rubber Co will invest $550 million to build a new plant in Mexico, the company and the country’s economy minister said on Friday.
The Goodyear tire plant will be located in the central state of San Luis Potosi, Economy Minister Ildefonso Guajardo said at an event in Mexico City, confirming an earlier Reuters report.
The plant, which will begin production in mid-2017, will employ about 1,000 people at full production and make about 6 million tires per year for markets in the Americas, Goodyear said in a statement.
The company said the new factory would be part of its effort to meet growing demand for premium passenger-car tires in North America and Latin America. It expects demand for them to grow by 10 million tires a year from 2014 through 2019.
Goodyear’s announcement marks the latest in a recent bonanza of auto investments in Mexico to take advantage of the country’s low wages, free trade agreements and proximity to the United States.
This spring, Ford Motor Co, Toyota Motor Corp and Volkswagen AG have all said they would expand their presence in the country.
Goodyear, which has 50 plants in 22 countries, sold 162 million tires worldwide last year, including 61.1 million in North America and 17.4 million in Latin America, according to its 2014 earnings report. The Mexican plant investment is part of Goodyear’s plans for capital spending of $1.1 billion in 2015 and $1.2 billion to $1.3 billion in 2016.
Mexico is the fifth-largest producer of auto parts in the world, Economy Minister Guajardo said. (Reporting by Joanna Zuckerman Bernstein in Mexico City; Additional reporting by Ben Klayman in Detroit; Editing by Lisa Von Ahn)