French car parts maker Faurecia opens $147 million plant in Mexico

MEXICO CITY (Reuters) – French car parts maker Faurecia opened a $147 million plant in Mexico to make car seats and interiors, the company said on Thursday, the latest in a string of auto sector investments driving the country’s so-called “nearshoring” boom.

Faurecia said it expects the plant in the northern border state of Nuevo Leon, serving clients such as Volvo and Stellantis, to produce more than 2 million vehicles’ worth of car seats a year by 2025.

To reach that goal, it will double seat-making capacity by the end of 2023, the company said. It has not yet determined a timeline for production of interiors but aims to make 720,000 vehicles’ worth by 2024.

Of the 125 high-level investments to land in Nuevo Leon in recent years, more than a quarter belong to the auto sector, state Economy Minister Ivan Rivas said in a statement.

The most prominent investment to come to the state is from electric vehicle maker Tesla, which plans to build a “gigafactory” that local officials have said could bring in investment of up to $10 billion and create 10,000 jobs.

Moves to Mexico are part of the “nearshoring” trend aimed at bringing operations from Asia closer to their final destination, which tends to be the United States.

The plant opened Thursday is Faurecia’s 32nd site in Mexico. Faurecia last year took over German rival Hella to form a new European car parts company called FORVIA.

(Reporting by Kylie Madry; Editing by Sonali Paul)