Upon first inspection, it’s not immediately evident that this is the future of global auto manufacturing. Step inside the auto body plant at Nissan Mexico’s new A2 factory a few miles outside the city of Aguascalientes, and you could be in a semiconductor clean room. The floors are spotless. The space is brightly lit. And it’s quiet — the main sound is the muffled, faraway thump of the plant’s high-speed metal press.
Then you turn onto the production floor and see the robots.
There are hundreds of them. Across multiple lines, bright-yellow bots spot-weld Nissan Sentra body frames with lightning-quick precision. Overhead, Z-shaped arms lift side panels high into the air, swivel around and lower them onto waiting carts. The carts then drive off on their own, following magnetic strips in the floor. And in between, hard-hatted line employees move about purposefully, double-checking welds, smoothing down rough spots with air-powered grinders, pressing doors and fenders into place.
The orchestrated process is repeated throughout the 21-million-square-foot A2 plant and at the older A1 facility a few miles up the road. The plants employ more than 8,700 workers. They run 23 hours per day, six days per week. And they’re relentlessly productive — a new car rolls off their lines every 38 seconds. Factor in additional plants in Cuernavaca, and you can see why Nissan Mexico has an annual production capacity of 850,000 vehicles.
That capacity has made the company the dominant player in a country that’s emerged as the world’s fastest growing auto manufacturer. “We have 25.7 percent market share in Mexico,” says Nissan Mexico President and Managing Director Airton Cousseau, adding that the company also exports cars and parts to more than 50 countries. “We are also key to Mexico’s auto manufacturing. In 2014, we passed Brazil and are now the world’s seventh largest automaker. By 2020, Mexico will be the sixth, and maybe even the fifth biggest auto manufacturer in the world.”
But while the two plants have helped fuel the rise of Nissan Mexico and the country’s automotive industry, they’ve also made an equally profound impact on Aguascalientes and its people.
Aguascalientes — a name shared by the city and its surrounding state — sits on a high desert plateau in the middle of Mexico, 300 miles northwest of Mexico City. For much of the 20th century, the local economy was based on agriculture and silver mining. That began to change in 1982, when Nissan opened the A1 plant, which initially produced engines and powertrains. More growth followed. Thanks in part to the passage of the North American Free Trade Agreement (NAFTA) and the Mexican government’s partial deregulation of the auto industry, A1 added an auto production line in the early 1990s.
But the real change happened in 2013, when Nissan Mexico opened the $2 billion A2 plant, adding 3,000 new jobs. The project also included an industrial park that’s home to three Nissan parts suppliers; those companies contributed an additional 9,000 jobs. A study by the Monterrey (Mexico) Institute of Technology and Higher Education estimates the project has created between 58,000 and 74,000 jobs in and around the region, in sectors as diverse as construction, hospitality, and financial services. “In Mexico, we will have around 2 percent GDP growth this year,” says Cousseau. “But Aguascalientes has seen 5 percent growth. That tells you what Nissan means to Aguascalientes — and what Aguascalientes means to Mexico.”
The effects are evident around the city. On a Tuesday morning in November, Aguascalientes is bustling. Shoppers crowd the sidewalks, and bright red Nissan Tsuru taxis zip about the cobblestoned streets. For the past 15 years, Rosa Espino Davalos has owned Jabon Artesanal, a small shop that sells handmade organic soaps on a side street a few blocks from downtown. Her business has picked up in the last few years. “Nissan’s presence has directly affected my company,” she says. “There are more people living in and visiting Aguascalientes now. And Nissan employees and their families are my biggest customers.”
Across the street, Graciela Rodriguez Arete works at Jugos Grand Prix, a sandwich shop that’s been in operation at the same location for 30 years. “There was a boost in sales almost immediately after work completed on the new Nissan Mexico plant,” she says. “We’ve seen close to a 60 percent increase in business in the last two years.”
“Making dreams come true”
All of this growth — along with Nissan Mexico’s massive investment — begs one question: Why Aguascalientes? Government incentives have played one role. The state of Aguascalientes has aggressively courted businesses over the last decade — Texas Instruments and Coca-Cola have built facilities in the last few years. And the World Bank has named it Mexico’s most business-friendly state.
Location and infrastructure offer another reason. Aguascalientes sits in the middle of the country, halfway between the Atlantic and Pacific coasts. Mexico has a well-developed highway system. And three national railways intersect in the city (and one now runs through the A2 plant). The result: It’s easy to load up and transport vehicles and parts around the country and to its coastal ports.
But perhaps the most important factor is the presence of a young and able workforce. Approximately half of Aguascalientes’ 1.1 million residents are under the age of 24, and Nissan Mexico is a powerful draw. Aguascalientes native Luis Urban joined the company in 2007, after earning his master’s degree from the city’s International Technological University. He now works as a quality assurance engineer in the A1 engine casting plant. “Before I finished the university, I had the dream of working for Nissan Mexico,” he says. “And when I started, I saw that the teamwork is strong here. We are all united with one purpose, and we all have a strong passion for our jobs.
“Nissan gives you a tremendous opportunity if you want to take it,” he adds. “I have moved up from a trainee to an engineer quickly. That has been a very big change for my family. I can take care of my mother. I have even been able to help my sister finish her university studies.”
Gustavo Reyes Garcia, a senior production supervisor at the A2 plant, echoes Urban’s sentiments. “I previously was a supervisor at a telecommunications company,” he says. “That was not a bad job, but working here changed my life. Nissan Mexico provided me with opportunities. Everyone — my parents, my sons and my brothers — has benefited from me working at Nissan Mexico.”
Back in his Mexico City office, Cousseau breaks into a grin when he hears that. “There are a lot of factors that have helped Nissan Mexico become a market leader and develop a reputation for quality,” he says. “But if you go to our manufacturing line, you will feel that we are not only building cars. We are making dreams come true for the Mexican people. Buying a car is the second biggest investment of a Mexican person’s life. First is a house, and second is a car. And that makes you put your heart, passion, and feelings into your work.
“Everybody in Nissan Mexico has what we call the ‘one team spirit’ mindset,” he adds. “Everybody is fighting for the same goals and objectives.”
More changes lie ahead for Aguascalientes. Nissan Mexico is now consolidating its parts distribution operations to the A2 plant. And last year, Nissan and Germany’s Daimler AG announced a joint venture to build another new plant in Aguascalientes. Construction will start later this year on land adjacent to A2. When complete in 2017, the $1.4 billion factory — already dubbed A3 — will add another 5,700 jobs to the local economy and produce 300,000 vehicles per year, pushing Nissan Mexico’s total annual output past the 1 million mark. And as Cousseau notes, those vehicles will be Infiniti and Mercedes-Benz sedans. “Mercedes is a luxury brand. And Infiniti is a luxury brand that has only been built in Japan and the United States,” he says. “This is the first time luxury automobiles will be built in Mexico, and all the manufacturing will be operated by Nissan Mexico and our employees. It shows we can produce cars at a competitive price with high quality.”
From Urban’s perspective, the new project offers a vote of confidence in Nissan Mexico — and in Aguascalientes. “The city has a new face because of the investments our company has made. This will have a huge impact in the city of Aguascalientes and in the surrounding area.
“Ten years ago, some people knew about Aguascalientes,” he adds. “But now when you talk about Aguascalientes, they imagine the big manufacturing complex. It even happens when you go to other countries and people ask where you are from. When you say ‘Aguascalientes,’ they ask, ‘You are with Nissan, right?’”
Leading the Aftermarket
FedEx helps Nissan Mexico fulfill a key part of its brand promise. Giustiniano Porcu has a challenging job. As director of aftermarket sales for Nissan Mexico, he oversees an operation that distributes parts throughout Mexico and to 57 countries around the globe. On an average day, his team sends out close to 2,400 parts to destinations in the U.S., Canada, Brazil, and as far away as Australia. Nissan Mexico became a key global parts distribution hub in 2009. One big reason: the country’s liberal approach to free trade. Mexico has free trade agreements with 44 different countries — the most of any nation on Earth. And as Nissan Mexico has continually boosted its output in recent years, the aftermarket operation has grown in both scope and complexity.
While FedEx plays a major role in Nissan’s global supply chain, it is also central to its on-time repair parts deliveries. If a car breaks down in, say, Lima, Peru, or Winnipeg, Canada, and the dealer lacks the replacement part, Porcu’s team calls in FedEx Express. “It’s quite a sensitive issue when a customer has a car that is immobilized and the needed part does not arrive on time,” he says. “That’s why our relationship with FedEx is paramount in importance. FedEx fulfills our emergency orders in 24 to 48 hours or less. Getting a part to its destination on time — and getting a customer’s car back on the road — can really help determine if the person will remain with or leave our brand. FedEx helps us deliver on our promises to our customers.”
Nissan Mexico President and Managing Director Airton Cousseau agrees. “We are dealing with cars, and all cars sometimes have problems,” he says. “But clients aren’t necessarily upset when they have a problem with a car. They are upset if you don’t solve their problem quickly. The way that we are using FedEx right now is to speed up all the processes to fix problems in a very fast way.”
Clean and Green
Nissan Mexico’s A2 plant is a model of environmental responsibility.
The A2 plant is a massive operation. Its five buildings take up 21 million square feet of space — the equivalent of 364 football fields. Equally eye-opening: More than half of the plant’s energy comes from clean and renewable sources.
Wind power and methane are the two main sources. The wind power comes from Mexico’s largest wind farm, 600 miles away in Oaxaca. The methane is piped in from a local landfill.
Other key green facts:
- Approximately 7 percent of the plant’s ceiling is translucent, allowing for natural light to flood operations
- An on-site water treatment facility recycles wastewater for use with landscaping
- An on-site tree farm supports area reforestation programs