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Tuesday, 26th February 2013
In General Japan News,

Japanese automakers look abroad for cheaper production

An increasing number of Japanese car manufacturers are moving their operations to Mexico as production costs are becoming prohibitive in their own country.

It's not just the cheaper prices which are appealing to these companies; it seems that speed is of the essence when it comes to car manufacturing in Mexico.

Armando Avila Moreno, vice president for Nissan Mexicana, said: "Our speed is the fastest in the world. We make a vehicle every 55 seconds."

The vast majority of cars produced in Mexico - 80 per cent - are exported to countries across the world, so it seems the phenomenon of building vehicles on foreign soil is not unique to Japanese manufacturers.

According to figures released by the Mexican Automobile Industry Association, the number of cars and light trucks produced in Mexico in January 2013 was 20 per cent up to 242,855 compared to the same time period in 2012.

Overall, the number of vehicles exported from the South American nation rose by 14 per cent to reach a record of 178,562 in January 2013.

In August 2012, Carols Guzman, head of ProMexico, suggested that new vehicle manufacturing plants from the likes of Mazda Motor Corp, Nissan Motor Co and Audi opening in the country will help to make Mexico one of the biggest exporters of cars.

He said: "We expect a very good period of five to seven years in Mexico in terms of growing exports for cars."

It's not just Mexico that Japanese automakers are looking to in order to boost production though. Toyota is proving to have a successful business model manufacturing cars in Thailand for the Middle East and Latin American markets.

The Japan Times recently reported that Toyota has established three factories in the South East Asian country, while it states that both Honda and Nissan are planning to invest in the nation in a bid to boost sales.

Ryota Himeno, an analyst at Barclays Securities Japan ltd, was quoted by the publication as saying that "Thailand is a flourishing market for shipping lines [because] its ports have been upgraded [and] it's also close to emerging economies in Asia".