Electronics Giant to Build Assembly Plant in Tijuana
Giant Japanese home and car stereo manufacturer Pioneer Electronics plans to build a 70,000-square-foot plant here to assemble car stereo speakers, several sources involved in the deal said Tuesday.
Pioneer, which posted worldwide sales of $2.4 billion last year, is one of several Japanese and South Korean consumer electronics giants to have been attracted by Mexico’s low labor costs in recent years. Other companies that have moved or expanded in Tijuana include Sony, Canon, Sanyo, Hitachi, Samsung and Matsushita.
Pioneer is completing a deal to buy 7 acres in the new Frontera business park in the Mesa de Otay section of Tijuana, the sources said, and is receiving bids from general contractors to build a plant that Pioneer will occupy by the first of December.
The 7-acre parcel Pioneer is buying in the Frontera park is large enough to accommodate expansion by at least 70,000 square feet, sources said. Employees are expected to number at least 200 once the plant is fully operational.
Pioneer will also set up an office in San Diego to direct the manufacturing operation, Pioneer sources said.
The 86-acre Frontera business park, to be situated just south and east of the Otay Mesa border crossing, will be a joint venture of Koll Co., the Newport Beach-based commercial real estate developer, and Grupo Gutsa, a Mexico City general contractor. The partners are also looking for a a third financial parter, possibly a Mexican bank, soures said.
Has Large Retail Center
Among Gutsa’s other Tijuana projects is a large retail center, Otay Centro Commercial, which is also situated near the Otay Mesa border crossing and is anchored by a Dorian’s department store.
Koll officials were unavailable for comment on the Pioneer deal Tuesday night. Koll officials had previously confirmed they were interested in getting involved in development of maquiladoras, as Mexican manufacturing plants used by foreign companies are called.
With the weakened peso attracting more and more companies, maquiladora permits are being issued at twice the rate of last year, Mexican government officials said recently.
According to sources familiar with maquiladoras, Koll’s involvement in the business park may be one of the first ever by a U.S. real estate developer in Mexico.
Declined Comment
Jim Reid, an executive of Mitsui & Co. USA, the U.S. subsidiary of the Japanese trading company that is representing Pioneer in its Tijuana deal, declined to comment Tuesday. “We don’t have anything to say until after the land and construction deals are signed and completed,” Reid said.
Tokyo-based Pioneer Electronics sells mainly car stereo and home audio and video equipment. The company’s U.S. subsidiary, Pioneer Electronics (USA) is based in Long Beach. Pioneer’s principal U.S. car-stereo manufacturing plant is in Springboro, Ohio, and its home entertainment plants are in Carson and Pomona.
A Pioneer source said the company plans no layoffs or job transfers and that the Tijuana plant will add to the capacity already provided by the Springboro plant.
