The Swedish company already had facilities in the U.S, China, England, Germany, and Sweden when they saw the need to increase capacity even further. The reason to why the factory ultimately was placed in Mexico is explained by CEO Jan Pieters, in Swedish magazine Bergsmannen:
"We have been seeing a rise in demand for our products, and it was a natural step for us to increase the production capacity with a new plant. The US is an important market, but the plant we have there could not be expanded easily. Thus Mexico became a rather logical choice."
"It's no problem to find good workforce in Mexico, they have good basic education and some of the employees have also been trained in China and Sweden."
The CEO also explained Business Sweden´s contribution to the Swedish magazine:
"Business Sweden helped us with mapping the situation. They examined all aspects; from power supply to the presence of appropriate industrial parks, and there are many of those being built in Mexico, not just for the automotive industry."
When the decision had been made, the rest of the process was quick; the first construction steps for the factory were taken in early 2016 and more or less a year after, in early 2017 the plant opened.
The company´s new facility is located in Parque Opcion in the state of Guanajuato in Mexico. The surface is 13,000 m2 and initially, it will produce 3 600 tonnes per year, but at full production capacity is 12 000 tonnes per year. Guanajuato is very well located in terms of transport and communication. Mexico´s most important highways go through the city and it takes less than a day to get to the US border or to the important ports of the Pacific or the Gulf of Mexico.
In the interview with the magazine Bergsmannen, the image of Mexico as a country weighed down by crimes is brought up. The article states that the media image does not include another reality, a very substantial one: Mexico has several strong industrial centers, and many major car manufacturers have invested massive amounts in the construction of production and assembly facilities in the country. Since car manufacturers are important clients to Suzuki Garphyttan, it was logical for the company to establish a production facility in Mexico.
The threat from the country´s giant neighbour in the north is also discussed. The journalist asks Jan Pieters if he feels worried about the U.S President Donald Trump´s view on international trade and his outspoken intention to increase obstacles for trade between Mexico and the United States. But this does not seem to make Mr. Pieters lose sleep at night:
"We are not nervous about the risk that free trade might be threatened, and definitely not when it comes to the automotive industry. You need to remember that car manufacturing is a complex process where the different parts are manufactured in completely different parts of the world. The components for four-wheel drive vehicles come from one direction, injection from another and gearboxes from a third. And then the assembly takes place in a fourth place. "
What Jan Pieters describes is that the automotive industry is like a dense fabric with a high degree of integration of suppliers and customers; too strong to easily tear up and tear apart. And Suzuki Garphyttan's products are very important parts of that fabric.
Source: Bergsmannen JKA, May 8th 2017