U.S. automaker Ford plans to double its investment in Mexico. The move follows a $2.5 billion investment last year by the company to build an engine and a transmission plant in the country.

CCTV America’s Martin Markovits reports.

Ford Motors to build $1B new assembly complex, expand factory in Mexico

U.S. automaker Ford plans to double its investment in Mexico. The move follows a $2.5 billion investment last year by the company to build an engine and a transmission plant in the country. CCTV America’s Martin Markovits reports.

Ford is planning a big investment in Mexico. Earlier this month, the Wall Street Journal reported that the automaker plans to build a new assembly complex and expand an existing factory near Mexico City, likely exceeding $1 billion in costs.

The project will make room for several models, including a hybrid vehicle. The investment plan aims to double Mexican capacity by 2018.

With its close proximity to the U.S. and low wages, the move highlights how Mexico has become a popular place for global automakers to construct manufacturing plants in the country.

The move also follows a deal with the United Auto Workers in which Ford is expected to pay higher worker wages. These labor contracts have made it very costly for car companies to operate in the U.S. where the unions are much stronger.

The announcement is a boom to Mexico’s auto sector. Mexico’s Automotive Industry Association says factories in the country produced 3.2 million cars in 2014, an increase of 9.8 percent. Mexico has also surpassed Brazil as the seventh-largest auto-producing country in the world, the association said.