Japan's Jatco To Build CVTs In Mexico

MEXICO CITY June 16, 2003; Dow Jones reported that the chairman of Japanese transmission manufacturer Jatco Co. said Monday the company is investing $300 million to begin production in Mexico.

At a press conference in Mexico City, Hisayoshi Kojima said the facility in Aguascalientes will be the company's first manufacturing plant abroad.

Jatco manufactures continuously variable transmissions, or CVTs, which operate more smoothly and are more fuel efficient than traditional automatic transmissions.

It will begin producing 300,000 units a year in 2005, with the possibility of raising that under a second phase to 700,000 in 2006 or 2007, Kojima said.

The company, which is majority owned by automaker Nissan Motor Co. , will operate at the existing Nissan assembly plant in Aguascalientes, about 400 kilometers northwest of Mexico City.

Kojima said the attraction of the North American market, where fuel efficiency is an important issue, was among the factors that led Jatco to choose Mexico for its first production outside of Japan, according to a transcript from the presidency,.

The company will also take advantage of Nissan's presence in the country to reduce costs, he added.

Mexico's Economy Minister Fernando Canales said the announcement brings to $2 billion the planned investments this year in Mexico's automotive sector, which is a major component of the country's manufacturing industry.