POSCO Inter "162 Billion KRW Investment, Establishment of Gudong Motor Core Mexico Corporation"

Eco-friendly Vehicle Drive Motor Core, Establishment of Mexican Corporation Following Investment in Chinese Production Subsidiary

POSCO SPS Factory Overview

[Asia Economy Reporter Changhwan Lee] POSCO International announced on the 21st that it will establish an eco-friendly vehicle drive motor core production subsidiary in Mexico and take the lead in the North American market.

POSCO International held a board meeting yesterday and approved the agenda for investment in establishing a production subsidiary in Mexico to localize the production of drive motor cores in the North American region. POSCO International will invest 80%, and its wholly owned subsidiary POSCO SPS will invest 20% of the shares.

The investment approved at this board meeting is approximately 52 billion KRW, and the plan is to invest a total of 162 billion KRW by 2030 to make Mexico a forward base for drive motor cores.

The subsidiary plans to start construction of the factory in June next year and aims to begin operations in the second half of 2023. The initial production scale is 300,000 units per year and is expected to gradually expand to 1.5 million units by 2030.

POSCO International explained that it decided on this investment to target the North American region, the largest market for electric vehicles, and to strategically prepare for the U.S. government's eco-friendly mobility policies.

The U.S. has announced that by 2030, 50% of new cars sold domestically will be replaced with eco-friendly electric vehicles. Additionally, the U.S. government has accelerated market formation by encouraging domestic electric vehicle production through the signing of the United States-Mexico-Canada Agreement (USMCA) and the 'Buy American' policy.

Considering the U.S. import restrictions on electrical steel sheets, which are the material for motor cores, and logistics competitiveness, POSCO International selected Mexico, a major hub of the automotive industry, as the production base to target the North American market.

POSCO International's motor core factory is planned to be located in Ramos Arizpe City, Coahuila Province, Mexico, where many global automakers and parts companies have established operations.

A POSCO International official said, "By combining years of overseas investment experience, the technological competitiveness of our subsidiaries, and POSCO's material capabilities, we will utilize the Mexico production subsidiary as a key forward base for electric vehicle parts," adding, "Through this, we will solidify our position as a supplier of eco-friendly vehicle parts and play a role in realizing carbon neutrality for the POSCO Group."

This content was produced with the assistance of AI translation services.