The new company is expected to sell lube oils in Mexico and surrounding Central and South American countries, JX Nippon Oil & Energy, known as NOC, said in a statement.

Mexico is seeing more free trade with Japan, the U.S. and Central and South American countries, and Japanese automobile makers are speeding up the process of setting up bases within Mexico to export cars overseas, NOC said.

For this reason, the company expects Mexican demand for lubricants, especially lubes for cars made by Japanese manufacturers, to increase.

Therefore, the new company expects to increase lubricant sales in Mexico and other Central and South American countries.

NOC currently ships lubes from its U.S. plant in Alabama, to sell in Mexico, a company official told Lube Report.

However, the official declined to state whether this supply system will change after the Mexican subsidiary is set up.

JX Nippon Oil & Energy USA Inc. announced in September that it would increase its lubricants blending plant capacity in Alabama from 34 million liters per year to 56 million liters by the end of 2015. The company cited increasing car sales and production, and said it expected a growing demand for automatic transmission fluid, continuously variable transmission fluid and energy saving high-efficiency engine oils from Japanese and Korean automobile manufacturers.

With the establishment of the Mexican company, NOC said it will have 47 production bases and 28 sales bases in the world.

Its current sales volume of lubricant is 500,000 kiloliters per year, and the producer expects to boost it to 900,000 kl/year by 2020 by expanding their business in emerging countries where lube demand is growing.