Move over, U.S. and Canada. There’s another tire manufacturing powerhouse within the North American free trade zone that’s attracting hundreds of millions of dollars in outside investment: Mexico.
No fewer than four tire manufacturers are making major investments in new and/or existing tire production facilities in Mexico, with three — Yokohama Tire Corp., Zhongce Rubber Group. Co. Ltd. (ZC Rubber) and Sailun Tire Americas (STA) — having broken ground on future manufacturing plants within the last six months.
Yokohama’s plant in Saltillo, Mexico, which was first announced in March 2024, represents a capital investment of $380 million. It will begin production in 2027 and will have a planned, annual output of five million units.
Construction also is underway at ZC Rubber’s new plant in Mexico, which represents an investment of $550 million and will be located just 150 miles from the U.S. border.
ZC Rubber officials say the factory will be up and running by the end of next year and will initially have an annual capacity of 13.5 million passenger tires, plus 50,000 tons of OTR tires.
When fully operational, STA’s factory in Mexico, a $240 million joint venture with Sailun Singapore, will manufacture six million “semi-steel radial” tires a year, with the possibility of later producing an additional 1.65 million all-steel radials.
These factories will be the first new tire manufacturing plants built in Mexico by non-native companies, at least to my knowledge, since 2018, when Michelin North America Inc. opened a light truck tire manufacturing facility in that country. Michelin’s other plant in Mexico, which produces passenger tires, is located in Queretaro. It dates back to 2002.
Other non-Mexican tire manufacturers that have existing new tire production facilities in Mexico include Goodyear Tire & Rubber Co., which opened a consumer tire plant in San Luis Potosi in 2017; Bridgestone Americas Inc., which opened a plant in Monterrey 17 years ago and operates another plant in Cuernavaca that dates back to 1980; and Pirelli Tire North America Inc. (PTNA), whose passenger tire plant in Guanajuato opened in 2011 and reached full operation in 2017.
PTNA has been particularly aggressive in expanding its capabilities in Mexico. In September 2021, its parent company, Pirelli & Cie SpA, approved a $36 million investment in the firm’s Guanajuato plant to boost annual production capacity there to 7.2 million units. Two years ago, Pirelli announced it would invest an additional $15 million in the factory, where it unveiled a new research and development center nearly 12 months ago.
Tiremaker investment in Mexico coincides with a steady increase in exports of tires from that country to the U.S. According to MTD’s 2024 Facts Issue, published this past January, 22.6 million passenger tires were exported from Mexico to the U.S. in 2023, a 6% year-over-year increase. (In 2022, Mexico exported 21.9 million passenger tires to the U.S., an increase of just under 4% from prior-year levels.)
The reasons for Mexican tire production investment are many. Besides the obvious cost savings in labor, having plants in Mexico helps insulate manufacturers from the unpredictability of overseas shipping — a dynamic that Ron Dolan, president of STA, alluded to this past summer when I spoke with him as part of MTD’s exclusive Mid-Year Q&A series.
“By expanding operations to Mexico, Sailun aims to enhance consistency, security and predictability in the production of its tires," he says.
Jeff Barna, president and CEO of Yokohama Tire Co., upon breaking ground on Yokohama’s Mexico plant this past April, said, “We are not only bringing our products closer to our local customers, but (are) also enhancing the quality and accessibility of our offerings.”
ZC Rubber officials, at their plant’s Aug. 6 groundbreaking, offered similar sentiments, stating that the company’s Mexico factory “will greatly benefit both the North American and Latin American markets, providing customers with more efficient and high-quality products and services.”
While the number of U.S.-based manufacturing plants will remain greater than the number of Mexico-based tire manufacturing facilities well into the foreseeable future — Michelin, for example, has 11 plants in the U.S., while Bridgestone and Goodyear each have seven — it’s a sure bet that more tire manufacturers will build and/or expand tire production facilities “south of the border” as the reasons for doing so remain attractive.
