Demand for automobiles in North America is on the rise and so are companies' investments in Mexico. There, makers of cars and car parts find cheap labor costs and a way around costly tariffs to the US.
Germany's Bosch is looking to cash in on burgeoning demand for automobiles in North America by investing 400 million euros ($546 million) in Mexico, the company's CEO was quoted by a German newspaper as saying on Wednesday.
Theworld's largest car-parts maker
will make the investments over the next few years, Bosch's chief executive, Volkmar Denner, told the Stuttgarter Zeitung daily.
Some 3,000 new jobs will also be created as the company builds a research and development center and boots its production capacity, he said.
Bosch's announcement comes amid a broader push by major European auto makers to invest more in Mexico as demand in the US, the world's second-largest market, is on the rise.
Manufacturing south of the border is a way for auto makers to skirt some currency and tariff costs they would have to pay were they importing from other countries. Mexico also offers cheaper labor costs than the US or Europe.
Luxury car maker BMW has said it will make a major announcement about its manufacturing in Mexico on July 3. Daimler has already announced similar plans.
Bosch's revenues around the world have exceeded expectations, Denner told the newspaper. In western Europe, the concern reported a swell in revenue of 4 percent. In China and North America, sales were also better than expected, he said.
cjc/hg (Reuters, dpa)