Volkswagen engine plant in the municipality of Silao, Guanajuato is in the middle of an expansion process to double its production capacity, company officials revealed to local media.
By 2020, the facility will increase its output to 700,000 engines a year from current 350,000, said Marc Riera Schoengarth, Volkswagen Mexico Commodity Manager, to Periodico AM without providing details about the amounts to be invested.
“It was not an easy decision for the company to choose the Silao facility because there is a significant number of engine plants in Volkswagen that were struggling to get the assignment, but in the end, we got the group to pick out us,” Riera added.
The official said that the strong supply chain available in the Bajio region (central Mexico) was a leverage factor for the company to invest in Guanajuato. At least 50% of the plant’s main suppliers are established nearby, including aluminum die casters, stamping facilities and sensor manufacturers, among others.
The first engine prototypes will be ready next year, with production test runs taking place by the end of 2018. Official production is expected to begin in 2019.
Those engines will replace Germany imports that are supplied to the Puebla Assembly plant, increasing the profit margins for the vehicles built there, Riera said.