Chinese auto parts manufacturer Huizhou Toneluck Electro-Mechanics revealed plans to set up a plant in Mexico aimed to expand its sales in North America.

The company’s managing director, Huang Zihong, told China Daily about plans to spend an initial US$ 7.3 million on the new factory, adding that the project is currently "at the stage of preparation".

Zihong said his company plans to buy land in Mexico by the end of this year and construction of the plant is set to take place in 2018.

Commercial operations are scheduled to start in 2019 with the company expecting annual sales of US$ 43.5 million. This would represent a significant proportion of the group's global business.

The Guangzhou-based company is a major global manufacturer of car door locks and electrical switches with annual sales of US$ 87 million. Around 40% of revenue is generated in China, with the US accounting for 30% and Europe 15%.

"We are now a tier two supplier in the US and European markets. We want to march into the tier one rank," Zihong said

"To achieve that, the ability of supply at a nearby location is a basic condition because it requires better supply chain management. Mexico, with its proximity to the North American market and relatively low labour costs, is a good choice," the executive added.

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MexicoNow

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