Weekly Review I May 29, 2024

GENERAL SITUATION IN MEXICO

Weekly Review I May 29, 2024

RELEVANT NEWS INDUSTRIES

EV

The Ministry of Economy of Nuevo Leon has announced the International Mobility of the Future Summit (IMOF), scheduled for June 26 and 27 at Cintermex. The summit aims to showcase Nuevo Leon’s achievements in electromobility and gather insights from global experts on future directions for the state in this field.

Companies like International Navistar and BYD, among others, are already engaged in electromobility initiatives in Nuevo Leon, with KIA considering electric vehicle production. The event will host 500 supplier companies, over 100 buyer companies, and more than 2,000 B2B meetings. It will also feature exhibitions from notable companies like Kia, Siemens, and Festo, as well as conferences with experts like Maria Coudoin from Renault and Christopher Borroni, formerly of GM and Chrysler.

Topics will cover future vehicles, sustainability, innovation in services, and infrastructure for electric vehicles. With over 2,500 attendees expected, including international delegations from Canada and Switzerland, the summit aims to highlight Nuevo Leon’s advancements and attract further investment to the region.

SOURCE: MEXICO INDUSTRY

Chinese manufacturer Yutong is beginning to lead the growing electric bus market in Mexico, which during 2024 has a market value of around 280 million dollars and is estimated to have an annual growth rate of 31.6% in the next five years, so that in 2029 it will exceed 1 billion dollars, according to Mordor Intelligence.

Its Chinese peers Zhongtong, BYD, King Long, Sunlong or Sunwin, as well as Volvo and Daimler are strong competitors. Because of their interest, units of some of these brands are currently circulating in different cities in test programs.

Yutong de Mexico once again won a bidding process in Mexico City, by obtaining a contract to sell the first 50 new electric buses to the Public Transportation Network (RTP) and to adapt a charging area for the units, which implies an investment of “more than 408 million pesos (24.5 million dollars), before VAT”, according to the agency.

The other two participants that submitted proposals in the bidding process were: Zhongtong Mexico and LOIALT.

SOURCE: INDUSTRIAL NEWS BC

RELEVANT NEWS INDUSTRIES

AUTOMOTIVE

Mexico’s international trade experienced a 127.6% increase in April, with exports rising by 11.4% annually and imports increasing by 15.4%. The most significant increases were in automotive products, plastic and rubber products, electrical and electronic equipment, professional and scientific equipment, and food, beverages, and tobacco. The rebound in exports is attributed to the growth in automotive production and exports. However, maintaining this export rhythm will be challenging due to lower global economic growth. Despite the increase in exports, April recorded a trade deficit of US$3.746 billion, compared to a surplus of US$1.992 billion in March. In 2023, Mexico reduced its trade deficit by nearly 80%, achieving a negative balance of US$5.463 billion.

SOURCE: MEXICO BUSINESS NEWS

RELEVANT NEWS

BUSINESS CHAMBERS

GUANAJUATO

Guanajuato’s business chambers are promoting citizen participation in the June 2 elections by promoting voting rights through promotions and labor incentives. The National Chamber of the Restaurant Industry (CANIRAC) and the Employers’ Confederation of the Mexican Republic (COPARMEX) have launched campaigns highlighting the importance of voting for democracy and community decision-making. The Electoral Institute of the State of Guanajuato (IEEG) has formed a strategic alliance with CANACO, the Mexican Association of Hotels and Motels of Leon, and the Shopping Centers of Leon to promote electoral participation. Promotional materials, voting spots, and displays with the phrase “Your vote leaves a mark” are being distributed in affiliated establishments.

SOURCE: LIDER EMPRESARIAL

AUTOMOTIVE CLUSTER OF GUANAJUATO (CLAUGTO)

During the “CLAUGTO Annual Assembly of Associates,” attended by over 200 automotive industry leaders, Rolando Alaniz Rosales stepped down as president, with Carlos Talamantes, CEO of Witzenmann, taking over. Alaniz emphasized the importance of the new board led by Talamantes in shaping future policies and projects for the sector globally. Talamantes stressed the need for a skilled workforce and maximizing business opportunities within the automotive supplier forum. Governor Diego Sinhue Rodriguez Vallejo praised the cluster’s growth and its role as a key exporter and job creator in Guanajuato. The event also included presentations on the achievements of 2023 and plans for 2024, with attendees ranging from partners, affiliates, and governmental representatives to academic stakeholders.

SOURCE: MEXICO INDUSTRY

SWISSCHAM

In collaboration with the EUROCAM Chambers of Commerce in the Bajio region, SwissCham organized the Euro Match Meeting 2024 in Queretaro, a networking cocktail event with participants from companies located in the region to promote business opportunities, collaboration and generation of synergies among company representatives.

SOURCE: SWISSCHAM

NEWS BY STATE

SONORA

In order to strengthen binational ties between Sonora and Arizona, Governor Alfonso Durazo Montaño held a meeting with the consuls of Mexico in Arizona and the United States in Sonora. These meetings promote the development of the states on the border between Mexico and the United States, but especially between Sonora and Arizona, said the Governor, since culture and tourism are an engine for the economic growth of the two regions.

SOURCE: EL IMPARCIAL

BAJA CALIFORNIA

Investors in Baja California are waiting for election results to make large investment movements, resulting in a low economic outlook worldwide. In the first quarter of 2024, new foreign investment in Baja California was less than three million dollars, and investment left was less than 10 million dollars. This drop is attributed to the electoral panorama keeping investment on hold. Economist Roberto Valero states that it is normal for investors to decide not to invest or take their money out of a country in an electoral process, as they are waiting for the results and future of each nation. With over 30 countries set to have new presidents or presidents in 2024, investors are analyzing the situation of each country, with big changes expected at the end of the year or next year.

SOURCE: INDUSTRIAL NEWS BC

NEWS BY STATE

COAHUILA

Coahuila Governor Manolo Jimenez Salinas has presented the State Development Plan 2023-2029, which aims to address various aspects of Coahuila’s development, including Order and Security, Global Coahuila, Human Development, Sustainable Infrastructure, Citizenship, and Good Government. The plan includes major infrastructure works in La Laguna, a mobility project in the southeast, a major economic development project in the central region, and a focus on strengthening the binational and economic relationship with the United States. Starting in July, the plan will be presented with new projects, programs, and works for the five regions and 38 municipalities. The goal is to provide citizens with certainty about the direction of his administration.

SOURCE: MEXICO INDUSTRY

NUEVO LEON

Ivan Rivas Rodriguez, state Secretary of Economy, indicated that Tesla’s layoffs in the state only affect the commercial area, without impacting the construction of the plant, and highlighted the progress in infrastructure and preparation for the gigafactory in Santa Catarina. Regarding the progress of the Santa Catarina gigafactory project, “we could tell you that it has advanced in what we committed to them, in the incentives, which in some way were accepted. If you remember, they had to do with infrastructure, we are working on widening the Monterrey-Saltillo free highway to make it three lanes and an easy exit (to the border)”. We are also working on the entry and exit accesses to where the plant will be installed and on treated water issues, Ivan Rivas emphasized.

SOURCE: EL ECONOMISTA

NEWS BY STATE

SAN LUIS POTOSI

Japanese companies are expected to create 2,500 jobs in San Luis Potosi, attracting one billion dollars in investment. This has led to over 2,500 direct jobs and over 4,000 indirect jobs, ranking San Luis Potosi seventh nationally in FDI and first in the Bajio region. Asian companies are also attracting investment, with recent arrivals including Sinbon Electronics (Taiwan), Automann USA (USA), Taxan (Japan), and CSMET Group (China). Investments to the manufacturing sector are expected to grow at both national and state levels.

SOURCE: LIDER EMPRESARIAL

NEWS BY STATE

AGUASCALIENTES

The Japanese Chamber of Commerce and Industry of Mexico held a seminar in Aguascalientes to strengthen economic, cultural, and academic ties with Japan. The seminar aimed to promote future investments and benefit Japanese companies established in the state and region. Hiroko Toyama, Bajio Regional Director, stressed the importance of building strategies for new investments.

SOURCE: LIDER EMPRESARIAL

QUERETARO

Mexican company QSM Semiconductors plans to increase its investment in Queretaro to $12 million to construct a plant based on legacy nodes technology. This stable and difficult to replace technology will enable the company to innovate and manufacture semiconductors (chips) starting next year. The plant will consolidate Mexico’s presence in the international chip market, as all industries require chips, such as automotive, medical, aerospace, and security. The project aims to produce 10,000 silicon wafers per year in the short term. QSM Semiconductores is the only Mexican company that designs application-specific chips (ASICs) that can be customized according to client demands. The production of “Legacy” will be supported by the Engineering and Innovation Center (CEI) and the Integrated Circuits Center (CEDI), with an investment of $3 million. The complex task of manufacturing chips requires engineers, personnel with master’s degrees, PhDs in science, mechatronics, electronics, and solid state physics.

SOURCE: MEXICO INDUSTRY

NEWS BY STATE

CDMX

Mexico City’s economy is showing positive signs with increased foreign investment, consumer confidence, stable exchange rates, and better development opportunities. The “State Competitiveness Index 2024” by the Mexican Institute for Competitiveness ranks Mexico City as the only region with “very high competitiveness.” The city leads in GDP per capita, economic diversification, and usage of financial services like mobile banking and point-of-sale terminals. Strategies to boost competitiveness include attracting nearshoring investments and promoting digital access to telecommunications and internet services. In the first quarter of this year, Mexico City secured USD 12.043 billion in Foreign Direct Investment, representing 59% of the national total, a 38.6% increase from the previous year.

SOURCE: FORBES

STATE OF MEXICO

As of May, the State of Mexico led the nation with 703,920 businesses, followed by Mexico City and Jalisco, mainly in the tertiary sector (commerce and services). According to Inegi’s National Statistical Directory of Economic Units (Denue), Mexico has 5,564,612 businesses, with 44% in commerce and 41% in services. From November 2023 to May 2024, there was an increase of 23,536 businesses. From July 2010 to May 2024, the commerce sector saw a 5% increase, while the services sector experienced a 6% decrease.

SOURCE: EL SOL DE TOLUCA

INVESTMENT NEWS

CENTRAL MEXICO

LS CABLE & SYSTEM

The South Korean wire manufacturer announced a 100 million dollars investment in a new facility located in Corregidora, Queretaro. The company expects creating 500 jobs.

MATA AUTOMOTIVE

The Turkish automotive manufacturer opened its new expansion in Aguascalientes. The investment was 30 million dollars and created 400 jobs.

NORTH

SIETE LEGUAS AUTOMOTIVE

The Mexican harnesses manufacturer opened operations in Gomez Palacios, Durango, with an investment of 53.9 million dollars, creating 300 new jobs.

LIBUS

The care products producer expanded its expansion with a 2.52 million dollars investment in Santa Catarina, Nuevo Leon. The company created 80 jobs.

BENDIX

The braking systems supplier opened its new plant in Ciudad Acuña, Coahuila. The investment was 57 million dollars and creating 200 potential jobs.

SOURCES: CLUSTER INDUSTRIAL, LIDER EMPRESARIAL, MEXICO INDUSTRY

LEGISLATIVE CHANGES AND INITIATIVES

ENVIRONMENTAL

• SAN LUIS POTOSI: INITIATIVE TO REFORM VARIOUS PROVISIONS OF THE STATE FINANCE LAW REGARDING ECOLOGICAL TAXES

Presented by: Local Deputy Cecilia Senllace Ochoa Limon (SLP - PVEM)

Purpose: To define Ecological Taxes with a single criterion to avoid controversy between environmental and ecological matters.

To stop taxing activities related to indirect emissions of certain polluting substances into the atmosphere generated in the state’s production processes.

The funds collected may be allocated to the Public Environmental Fund.

To adjust the table of Greenhouse Gases or Compounds according to the equivalences and global warming potential that should be considered for the calculation of emissions.

To change the effective date of the tax from June 10 to July 1 of this year.

Status: 2024-05-23 - Initiative referred to the State Finance Commission for an opinion.

INDIGENOUS PEOPLE

• SINALOA: CONSULTATION OF INDIGENOUS AND AFRO-MEXICAN PEOPLES AND COMMUNITIES FOR THE STATE AND MUNICIPALITIES OF SINALOA

Presented by: Local Deputy Martin Vega Alvarez (Sin - MORENA)

Purpose: To establish procedures to guarantee the right to free consultation of the indigenous and Afro-Mexican peoples and communities of the State.

Generally, the following must be subject to consultation:

Any legislative or administrative measure likely to affect indigenous and Afro-Mexican peoples and communities.

Any development process that the state intends to implement, insofar as it may affect their lives, beliefs, institutions, and spiritual well-being, as well as the lands they occupy or use.

Any project that may affect the lands, territories, and other resources, the environment, and their forms of organization, particularly those related to the development, use, or exploitation of mineral, water, or other resources.

Status: 2024-05-23 - Initiative referred to Joint Commissions of Constitutional Points and Governance; and of Communities and Indigenous Affairs for an opinion.