source:Gasgoo.comSalinas Group, Mexican financial services, communications and retailing giant, and China's First Automobile Works Group(FAW) has held a ground breaking ceremony for their joint venture plant in the state of Michoacan in western Mexico last Friday, Automotive News reported.
Mexico's President Felipe Calderon participated in the ceremony and laid the cornerstone of the plant. "The plant is expected to cost about $150 million, and will take three years; it has an initial output capacity of 100,000 vehicles annually, Salinas spokesman Daniel McCosh told Automotive News.
Beijing-based newspaper Jinhua Times reported on November 12 that Tianjin FAW Xiali Automobile Co, a subsidiary of FAW, is ready to build an overseas plant in Mexico by the end of this month. When the plant is completed in 2010, it will produce Tianjin FAW Xiali Automobile Division's compact cars named Xiali and Weizhi, which will be sold in the Mexican market.
Salinas group is one of the top five syndicates in Mexico and has a history of 101 years. It operates in fields include banking, insurance, publication and communication. The conglomerate posts annual sales of $6 billion and earnings before interest, taxes, depreciation and amortization of $1.1 billion in 2006.
China's FAW initially hoped to open its first overseas plant in Russia, but later changed the plan on the grounds that the Russia market was saturated after a wave of foreign investments and that the Russian government has set up obstacles to prevent the flooding of foreign investments.
Mexico is Latin America's largest vehicle exporter and the world's seventh largest producer of vehicles. Many major automakers, including Ford, GM, Daimler Chrysler, Nissan, Toyota, Volkswagen etc, have already established assembly plants in the region.