Mercedes-Benz is considering moving the manufacturing of its CLA compact car to Mexico. This move would reduce possible exposure to currency swings. The risk of such impact is higher in Hungary, where the CLA is currently manufactured, than in Mexico. According to Automotive News, Mercedes-Benz expects the CLA to be extremely popular in the North American market. Manufacturing in Mexico, therefore, would make more sense in terms of logistics than continuing to produce the car in Europe.
Manufacturing the CLA in Mexico would involve a joint venture with Nissan, which would expand its Aguascalientes plant in order to accommodate the additional production. Nissan already plans to enlarge the factory for other purposes. Mercedes-Benz plans to employ two outsourcing alternatives: it will be taking manufacturing offshore and also establishing an equal partnership to solidify infrastructure and operations while still retaining production responsibilities for the CLA.
Nissan, with its plans to expand in Mexico, and Mercedes-Benz, with its aspirations to move there, clearly see Mexico as an ideal location for manufacture. Near-shoring can reduce manufacturing costs and is also a sensible strategy for products that are popular in the United States, due to its close proximity to the country.
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