'Un-Honda-like' problems plague new plant in Mexico
02-13-16, 09:42 AM
#1
'Un-Honda-like' problems plague new plant in Mexico
Honda has delayed the launch of its new HR-V.
http://www.autonews.com/article/2014...lant-in-mexico
Neal E. Boudette
Automotive News
October 27, 2014 - 12:01 am ET
Honda Motor Co.'s journey into Mexico has left it with a bout of indigestion.
The automaker's new $800 million plant in Celaya, about 160 miles northwest of Mexico City, has been struggling to meet demand amid problems caused by a green labor force, language barriers and a rail system prone to delays and occasional thefts, according to dealers who have discussed the matter with Honda officials.
Those challenges caused the plant's first product, the redesigned 2015 Fit subcompact -- which Honda was counting on to drive sales growth in the U.S. this year -- to stumble out of the gate two months late, with quality glitches and supply shortages showing up down the line.
Now, dealers say, the hitches have prompted Honda to push back the launch of Celaya's second product, the new HR-V, Honda's latest entry in the booming small-crossover segment. Dealers who had expected the car to arrive by the end of this year said they've been told that they will have to wait until the spring for shipments.
The troubles with the Fit and the plant are "such a departure from what we normally see when Honda starts a new plant in the U.S. or Canada," said Ron Harbour, a partner at consulting firm Oliver Wyman and an expert on auto plant efficiency. "What's happened is really un-Honda-like," he said.
The Fit launch has been uncharacteristically troublesome for Honda, which said it's re-examining its quality protocols worldwide. Last week, after the fifth recall in 12 months involving the redesigned model -- mostly affecting Japan-built Fits not sold in the U.S. -- Honda named a quality czar to oversee quality issues from r&d to market launch. Honda also said top executives would take pay cuts for three months to take responsibility for the car's troubles. The company said the added quality reviews could delay product launches, including the HR-V in Mexico.
Honda's bumpy road with its Mexico plant raises a warning flag for other automakers that are rushing to ramp up production in that country to take advantage of low labor costs, free-trade agreements with key export markets and insulation from fluctuations in the yen.
In addition to Honda, Nissan Motor Corp. and Mazda Motor Corp. have opened plants in the last 12 months. BMW AG, Volkswagen AG's Audi unit and Kia Motors Corp. also are building plants there.
Harbour, the auto production expert, said Mexico presents manufacturers with many challenges as well as advantages. With so many new plants springing up, finding enough skilled workers isn't easy, he said. And rail transportation can be a problem.
"Railcars do get hijacked," Harbour said. "You need to hire guards for the trains."
Honda dealers said they have had delays in Fit deliveries because the cars had to be repaired after parts were stolen from them while in transit in Mexico.
"As with shipments within the U.S. or from other plants, damage can occur during shipment," said Chris Martin, a Honda spokesman. Honda is "constantly evaluating the shipping processes to seek improvements," he added.
The Fit's troubles have been frustrating for U.S. dealers because they've seen strong consumer interest in the vehicle but haven't had enough inventory to deliver the cars customers are looking for.
"The Fit is going over really well with all age groups," said Greg May, owner of a Honda store in Waco, Texas. "You've got younger buyers coming in and people in their 50s and 60s who like the standard backup camera. But we can't get enough."
As of last week, May had just two Fits on his lot.
In particularly short supply, dealers said, are top EX-L trim-level Fits; models with navigation systems; and certain colors, such as yellow and blue. AutoNation Inc., the nation's largest dealership chain, operates 22 Honda stores, but its online inventory shows they collectively have just six Fits with navigation in stock.
George Rosenthal, a tech support specialist in Wheeling, Ill., said he put down a deposit and waited two and a half months for a Fit with a factory-installed navigation system before settling for one without.
Martin, the Honda spokesman, said Honda regrets "any inconvenience to our customers" who have had to wait to get Fits. He added that deliveries to dealers "improved dramatically through the summer" and pointed out that Fit sales had a record September -- with 6,628 cars sold, including some previous-generation models.
Even with the strong September, the Fit isn't helping Honda much. In the first nine months of the year, sales of the Fit are actually down 3 percent, at 39,618 cars. Honda brand sales have totaled 1.04 million cars and light trucks, up just 2,673 from a year earlier, while the overall market was up 6 percent
http://www.autonews.com/article/2014...lant-in-mexico
Neal E. Boudette
Automotive News
October 27, 2014 - 12:01 am ET
Honda Motor Co.'s journey into Mexico has left it with a bout of indigestion.
The automaker's new $800 million plant in Celaya, about 160 miles northwest of Mexico City, has been struggling to meet demand amid problems caused by a green labor force, language barriers and a rail system prone to delays and occasional thefts, according to dealers who have discussed the matter with Honda officials.
Those challenges caused the plant's first product, the redesigned 2015 Fit subcompact -- which Honda was counting on to drive sales growth in the U.S. this year -- to stumble out of the gate two months late, with quality glitches and supply shortages showing up down the line.
Now, dealers say, the hitches have prompted Honda to push back the launch of Celaya's second product, the new HR-V, Honda's latest entry in the booming small-crossover segment. Dealers who had expected the car to arrive by the end of this year said they've been told that they will have to wait until the spring for shipments.
The troubles with the Fit and the plant are "such a departure from what we normally see when Honda starts a new plant in the U.S. or Canada," said Ron Harbour, a partner at consulting firm Oliver Wyman and an expert on auto plant efficiency. "What's happened is really un-Honda-like," he said.
The Fit launch has been uncharacteristically troublesome for Honda, which said it's re-examining its quality protocols worldwide. Last week, after the fifth recall in 12 months involving the redesigned model -- mostly affecting Japan-built Fits not sold in the U.S. -- Honda named a quality czar to oversee quality issues from r&d to market launch. Honda also said top executives would take pay cuts for three months to take responsibility for the car's troubles. The company said the added quality reviews could delay product launches, including the HR-V in Mexico.
Honda's bumpy road with its Mexico plant raises a warning flag for other automakers that are rushing to ramp up production in that country to take advantage of low labor costs, free-trade agreements with key export markets and insulation from fluctuations in the yen.
In addition to Honda, Nissan Motor Corp. and Mazda Motor Corp. have opened plants in the last 12 months. BMW AG, Volkswagen AG's Audi unit and Kia Motors Corp. also are building plants there.
Harbour, the auto production expert, said Mexico presents manufacturers with many challenges as well as advantages. With so many new plants springing up, finding enough skilled workers isn't easy, he said. And rail transportation can be a problem.
"Railcars do get hijacked," Harbour said. "You need to hire guards for the trains."
Honda dealers said they have had delays in Fit deliveries because the cars had to be repaired after parts were stolen from them while in transit in Mexico.
"As with shipments within the U.S. or from other plants, damage can occur during shipment," said Chris Martin, a Honda spokesman. Honda is "constantly evaluating the shipping processes to seek improvements," he added.
The Fit's troubles have been frustrating for U.S. dealers because they've seen strong consumer interest in the vehicle but haven't had enough inventory to deliver the cars customers are looking for.
"The Fit is going over really well with all age groups," said Greg May, owner of a Honda store in Waco, Texas. "You've got younger buyers coming in and people in their 50s and 60s who like the standard backup camera. But we can't get enough."
As of last week, May had just two Fits on his lot.
In particularly short supply, dealers said, are top EX-L trim-level Fits; models with navigation systems; and certain colors, such as yellow and blue. AutoNation Inc., the nation's largest dealership chain, operates 22 Honda stores, but its online inventory shows they collectively have just six Fits with navigation in stock.
George Rosenthal, a tech support specialist in Wheeling, Ill., said he put down a deposit and waited two and a half months for a Fit with a factory-installed navigation system before settling for one without.
Martin, the Honda spokesman, said Honda regrets "any inconvenience to our customers" who have had to wait to get Fits. He added that deliveries to dealers "improved dramatically through the summer" and pointed out that Fit sales had a record September -- with 6,628 cars sold, including some previous-generation models.
Even with the strong September, the Fit isn't helping Honda much. In the first nine months of the year, sales of the Fit are actually down 3 percent, at 39,618 cars. Honda brand sales have totaled 1.04 million cars and light trucks, up just 2,673 from a year earlier, while the overall market was up 6 percent
Last edited by bitkahuna; 02-14-16 at 09:13 PM. Reason: correcting title
02-13-16, 09:52 AM
#2
Lexus Test Driver
Sounds like a nice job opportunity providing security for the rail and deliveries to the US provided you could get the Mexican government to allow your teams to carry rifles.
sucks. just seems like they have to add more cost in adding the extra security and other costs in training employess etc. I wish em luck
02-13-16, 10:54 AM
#5
Super Moderator
I Put the article title in the thread subject for you.
Interesting article, but it's a year and a half old. Is there a reason to bring this to the forefront now? Do you know if they're still having issues, or have they worked through these initial teething problems?
Interesting article, but it's a year and a half old. Is there a reason to bring this to the forefront now? Do you know if they're still having issues, or have they worked through these initial teething problems?
02-13-16, 11:04 AM
#6
Being honest,I didn't notice the date.Just showing the possible problems the companies moving operations to Mexico may have initially or longer.
I wouldn't buy a vehicle made in Mexico for a few reasons.
Carrier A/C is closing down their Indianapolis factory and moving operations to Mexico with a 1400 job loss.
The Honda Mexico issues post was in the thread on another forum.
Last edited by Joeb427; 02-13-16 at 11:07 AM.
02-13-16, 11:18 AM
#7
Something more recent....
Hope not a duplicate post
Reports: Ford to build new plant in Mexico
Michael Martinez, The Detroit News 12:49 p.m. EST February 8, 2016
Ford Motor Co. plans to build a new assembly plant in the Mexican state of San Luis Potosi and significantly increase its production in that country, according to multiple reports.
The plant will represent a $1.5 billion investment and allow Ford to build 350,000 cars annually, reports say. Ford is expected to announce the plans in the first quarter.
Reuters first reported the news last month, citing unnamed Mexican government officials. The Wall Street Journal on Monday said the new plant, and expansion of an existing plant, would double Ford’s production in Mexico.
“We do not comment on speculation,” Ford spokeswoman Kelli Felker said in a statement.
Ford last year said it would stop building its Focus and C-Max cars at its Michigan Assembly Plant and move production elsewhere. UAW officials said at the time that at least the Focus would move to Mexico. Ford executives have said they’re looking for a cheaper option to build lower-profit vehicles like the Focus and C-Max, and Mexico would represent such an opportunity.
The automaker said in April it would invest $2.5 billion for two new engine and transmission plants and an expansion of a diesel engine line that will create about 3,800 jobs.
Ford will spend $1.1 billion to build an engine facility within its Chihuahua Engine Plant, where it will produce a new gasoline-powered engine, creating 1,300 jobs. Ford will export the engines to the U.S., Canada, South America and the Asia Pacific region.
In addition, Ford will spend $1.2 billion to build a transmission plant within the premises of a facility used by transmission supplier and partner Getrag, which is based in the city of Irapuato in the state of Guanajuato. The project will create 2,000 jobs. The new transmission plant — Ford’s first transmission facility in Mexico — will produce two all-new automatic transmissions for key products primarily in South America, Europe and Asia Pacific as well as other North American markets.
The automaker will spend $200 million and create 500 more jobs to expand its I-4 and diesel engines production in Chihuahua.
The investment has drawn the ire of Republican presidential candidate Donald Trump, who has consistently mentioned Ford in his speeches, prompting President and CEO Mark Fields to send him a letter explaining what they’re doing there.
Ford has 11,300 employees in Mexico and builds the Ford Fiesta, Fusion and Lincoln MKZ there.
Executives have said they have no plans to build a new plant in the United States. Ford last opened a new U.S. plant — the Dearborn Truck Plant — in 2004.
Ford isn’t the only automaker investing in Mexico. General Motors Co. last year announced a $5 billion investment there over six years and Toyota Motor Co. said it will invest $1 billion in a Mexican plant. BMW AG, Volkswagen AG and its Audi unit, Nissan Motor Co., Kia Motors and Fiat Chrysler Automobiles NV also have built or announced new plants or plant expansions there.
Hope not a duplicate post
Reports: Ford to build new plant in Mexico
Michael Martinez, The Detroit News 12:49 p.m. EST February 8, 2016
Ford Motor Co. plans to build a new assembly plant in the Mexican state of San Luis Potosi and significantly increase its production in that country, according to multiple reports.
The plant will represent a $1.5 billion investment and allow Ford to build 350,000 cars annually, reports say. Ford is expected to announce the plans in the first quarter.
Reuters first reported the news last month, citing unnamed Mexican government officials. The Wall Street Journal on Monday said the new plant, and expansion of an existing plant, would double Ford’s production in Mexico.
“We do not comment on speculation,” Ford spokeswoman Kelli Felker said in a statement.
Ford last year said it would stop building its Focus and C-Max cars at its Michigan Assembly Plant and move production elsewhere. UAW officials said at the time that at least the Focus would move to Mexico. Ford executives have said they’re looking for a cheaper option to build lower-profit vehicles like the Focus and C-Max, and Mexico would represent such an opportunity.
The automaker said in April it would invest $2.5 billion for two new engine and transmission plants and an expansion of a diesel engine line that will create about 3,800 jobs.
Ford will spend $1.1 billion to build an engine facility within its Chihuahua Engine Plant, where it will produce a new gasoline-powered engine, creating 1,300 jobs. Ford will export the engines to the U.S., Canada, South America and the Asia Pacific region.
In addition, Ford will spend $1.2 billion to build a transmission plant within the premises of a facility used by transmission supplier and partner Getrag, which is based in the city of Irapuato in the state of Guanajuato. The project will create 2,000 jobs. The new transmission plant — Ford’s first transmission facility in Mexico — will produce two all-new automatic transmissions for key products primarily in South America, Europe and Asia Pacific as well as other North American markets.
The automaker will spend $200 million and create 500 more jobs to expand its I-4 and diesel engines production in Chihuahua.
The investment has drawn the ire of Republican presidential candidate Donald Trump, who has consistently mentioned Ford in his speeches, prompting President and CEO Mark Fields to send him a letter explaining what they’re doing there.
Ford has 11,300 employees in Mexico and builds the Ford Fiesta, Fusion and Lincoln MKZ there.
Executives have said they have no plans to build a new plant in the United States. Ford last opened a new U.S. plant — the Dearborn Truck Plant — in 2004.
Ford isn’t the only automaker investing in Mexico. General Motors Co. last year announced a $5 billion investment there over six years and Toyota Motor Co. said it will invest $1 billion in a Mexican plant. BMW AG, Volkswagen AG and its Audi unit, Nissan Motor Co., Kia Motors and Fiat Chrysler Automobiles NV also have built or announced new plants or plant expansions there.
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02-13-16, 02:01 PM
#9
Lexus Champion
I have a Q5 which I'll probably be trading later in the year. I'd buy another in a heartbeat, but the new gen will come from a brand new plant in Mexico so I'm shopping other brands/models now.
02-13-16, 02:13 PM
#10
Lexus Fanatic
Have you told any reps in the Audi chain of command that they may have lost you as a customer, and why? Although, right now, my guess is that they are probably more concerned with the fallout from the diesel-emission scandal than about plant-revisions.
02-13-16, 03:07 PM
#11
Lexus Champion
I'm sure everyone in the Audi division is preoccupied with the diesel scandal. I haven't tried notifying anyone at AoA of my thoughts/intentions. They are well aware of the implications of the move in production. They've put out a lot of PR on how careful they are being with the implementation, bringing workers to Germany for training, orientation etc. When you think of it, a lot of potential buyers may not be aware of any change, but since I know, I'll be moving on at least for now. Which is a shame because the Q5 has been a great, problem free vehicle for us.
Last edited by LexBob2; 02-13-16 at 03:10 PM.
02-13-16, 04:12 PM
#12
02-13-16, 04:13 PM
#13
For what it's worth, I have a 2011 CR-V that was assembled in Mexico that has been pretty much perfect and it doesn't have the interior rattles of my 2013 Lexus made in Japan.
Last edited by sivikvtec; 02-13-16 at 04:17 PM.
02-13-16, 05:33 PM
#14
Lexus Fanatic
To be honest, I have seen mixed results from vehicles coming from Mexican plants. Some have been virtually flawless, others have been a disappointment.
