GENERAL SITUATION IN MEXICO
Weekly Review I September 4, 2024
RELEVANT NEWS INDUSTRIES
AUTOMOTIVE
Chinese electric vehicle manufacturer BYD has paused its plans to build a new production facility in Mexico, delaying the decision until after the 2024 US presidential election due to uncertainties around trade policies, similar to Tesla’s strategy. Despite exploring Guadalajara and other locations, and actively expanding its presence in Mexico with new vehicle launches, BYD faces challenges from US-China trade tensions, including a
100% tariff on Chinese EV imports into the US. While the company continues to grow globally, with a 40% increase in sales and becoming the seventh-largest automaker, its strategic focus includes leveraging Mexico as a potential production hub amid these geopolitical and trade uncertainties.
SOURCE: MEXICO BUSINESS NEWS
RELEVANT NEWS INDUSTRIES
EV
Paco Garza, President of General Motors Mexico, highlighted the company’s crucial role in the automotive industry’s transition to electrification, with Mexico being a key hub for this transformation. At the Connecting The Future Summit organized by Honeywell, Garza announced that GM has invested over $1 billion in Mexico to produce electric vehicles, including models like the Blazer, Equinox, and the new Cadillac electric vehicle. He also emphasized the significance of the regional engineering center in Toluca, which supports global manufacturing with over 750 engineers. GM is also focused on training dealers and forming alliances with the government to accelerate electric vehicle adoption, despite challenges such as the availability of specialized talent. Garza compared the transition to electrification to the mass adoption of technologies like cell phones and computers and expects increased adoption of electric vehicles as the necessary infrastructure develops.
SOURCE: MEXICO INDUSTRY
AEROSPACE
The newly inaugurated Industrial Innovation Center of the Valle de la Mentefactura Guanajuato, with a 76 million peso investment, is set to significantly impact the aerospace industry. Located at Tecnologico Nacional de Mexico (TecNM) in Celaya, Campus II, and developed in collaboration with Idea Gto, TecNM, and Alianza Industria del Futuro, the center will provide cutting-edge facilities focused on aerospace technologies. It will feature specialized laboratories for electromobility and medical biotechnology, but its primary focus will be supporting aerospace sector innovations. Antonio Reus Montaño from Idea Gto emphasized the center’s role in driving high-impact aerospace projects and contributing to the sector’s growth in Mexico. Key figures such as Eduardo Knapp Hernandez and Oscar Rodriguez were present to mark the occasion and underscore the center’s strategic importance for the aerospace industry.
SOURCE: MEXICO INDUSTRY
RELEVANT NEWS BUSINESS CHAMBERS
CANACINTRA COAHUILA
Canacintra Coahuila and Prodensa recently collaborated to host a networking breakfast event focused on discussing the outlook and trends for the industry as we approach the end of 2024. The event brought together key industry stakeholders, business leaders, and professionals to explore emerging trends, opportunities, and challenges that could shape the sector’s future. Through insightful presentations and engaging discussions featuring keynote speakers: Marco Kuljacha, President of Prodensa; Alvaro Garcia, VP of Human Re-
sources; and Alejandro Mendoza, President of Real Estate, participants gained valuable perspectives on the evolving landscape, including technological advancements, market shifts, and strategic opportunities. The event underscored the importance of networking and knowledge sharing in navigating the complexities of the industry, fostering connections that will drive growth and innovation in the coming months.
SOURCE: PRODENSA
RELEVANT NEWS
BUSINESS CHAMBERS
FEMIA
The Mexican Aerospace Industry Federation (FEMIA) and the Performance Review Institute (PRI), which administers the NADCAP accreditation program for aerospace suppliers, have signed a Memorandum of Understanding (MoU) to form an alliance aimed at advancing the industry. The MoU, announced during the Farnborough International Airshow 2024, will accelerate entrepreneurship, professional development, and supply chain capabilities. Jay Solomond, EVP and COO of PRI, emphasized the collaborative impact of the partnership, while Luis Lizcano, FEMIA’s executive president, highlighted the commitment to enhancing Mexico’s manufacturing infrastructure through connectivity and oversight. The FEMIA, with over 360 companies exporting $9.4 billion in 2023, sees significant opportunities in areas such as electronics, heat treatments, forging, and plastic injection.
SOURCE: MEXICO INDUSTRY
CIMAL
In an extraordinary assembly, the Advanced Manufacturing and Automotive Industry Cluster of La Laguna (CIMAL) elected Tomas Alvarado Najera, Director of Continuous Improvement for Americas at Henniges Automotive, as its new president. Alvarado succeeds Gregorio Garza, Plant Manager at Caterpillar Torreon, who led the cluster for the past four years. Under Garza’s leadership, CIMAL experienced significant growth, expanding from 10 to 30 member companies and increasing its involvement with educational institutions and specialized committees. His strategic vision and collaborative approach helped position CIMAL as a key player in the region. Following Alvarado’s election, CIMAL’s directors engaged in a networking session to define strategies for the cluster’s direction over the next two years.
SOURCE: MEXICO INDUSTRY
NEWS BY STATE
BAJA CALIFORNIA
Despite exchange rate instability and economic uncertainty, Mexicali remains an attractive location for both national and foreign investment, according to Salvador Maese Barraza, President of the Maquiladora and Export Manufacturing Industry in the state capital (INDEX). This is demonstrated by ongoing interest from investors looking to expand existing facilities or launch new projects, such as those by real estate companies Zayat and Jysa. Maese Barraza noted that fluctuations in the peso-dollar exchange rate have actually improved the competitiveness of the state’s manufacturing industry, enhancing export sales. He emphasized that Mexicali serves as a model for how regions can adapt and thrive amid international volatility while maintaining investment flows in key sectors. According to the Ministry of Economy, Baja California’s share of total foreign direct investment (FDI) in Mexico has remained stable, at 9.9%, well above the historical average of 5.3%.
SOURCE: INDUSTRIAL NEWS BC
NEWS BY STATE
SONORA
Governor Alfonso Durazo Montaño has announced that the modernization of Ciudad Obregon International Airport will enhance the competitiveness of Cajeme, positioning it as the industrial hub of southern Sonora. The project, a key commitment from President Andres Manuel Lopez Obrador and President-elect Claudia Sheinbaum Pardo during their recent visit to Sonora, will commence in October with expansion work led by the Secretariat of the Navy. Planned upgrades include a 500-meter runway extension, additional maintenance lot, a 500-meter expansion of the terminal building, and improvements to the control tower, platforms, terminal infrastructure, and parking areas. These enhancements, along with the development of the Guaymas Port and its airport, are expected to boost economic growth and industrial activity in the region, making it a significant logistical and tourist destination. The governor also noted that during the recent visit, the Guaymas airport facilities were reinaugurated.
SOURCE: EL ECONOMISTA
NEWS BY STATE
NUEVO LEON
Nuevo Leon is strengthening its industrial focus with the arrival of Volvo’s new plant, set to be built in Cienega de Flores. Governor Samuel Garcia recently toured the construction site for what is expected to be Volvo’s largest plant globally. The facility, covering 127 hectares with a $700 million investment, will create 2,500 direct jobs and attract around 60 suppliers, establishing Nuevo Leon as a key automotive industry hub. The site will feature a Pocket Park and a dedicated supplier zone, highlighting its significance for both Volvo and the broader business ecosystem. Garcia expressed pride in hosting Volvo’s largest plant and praised the rapid construction schedule managed by Grupo GP. This development not only marks a significant advance for Volvo but also reinforces Nuevo Leon’s appeal as a prime destination for foreign direct investment.
SOURCE: MEXICO INDUSTRY
CHIHUAHUA
To enhance collaboration between manufacturing companies, authorities, and the educational sector, the government of Chihuahua introduced the Enlace de Practicas y Entrenamientos en el Extranjero (EPEX) project to manufacturers in Ciudad Juarez. The project, presented by the Secretariat of Innovation and Economic Development (SIDE), aims to develop a skilled workforce by providing students with global competencies and international work experience. Focused on the manufacturing industry, EPEX will facilitate internships abroad for students, who will then apply their newly acquired skills and knowledge to local industries upon their return. The presentation was part of a series of visits by SIDE’s General Directorate of Linkage, in collaboration with the Institute of Innovation and Competitiveness (i2C) and CENALTEC Juarez, to Taiwanese companies such as Winstron, Pegatron, Inventec, and Foxconn. EPEX, which has been operational for over 20 years, has positively impacted the region by providing over 300 students with valuable international experience. The presentation is expected to have a significant
NEWS BY STATE
GUANAJUATO
Guanajuato Promotes the Use of Hybrid and Electric Vehicles: Hybrid and electric vehicles play a crucial role in reducing pollutant emissions. A hybrid vehicle emits 57% less CO2 than a gasoline car, while an electric vehicle cuts emissions by 79%. To support this, the Association of Motor Vehicle Distributors of Guanajuato (AMDA) has partnered with the Secretariat of Environment and Territorial Planning (SMAOT) to provide certificates and “Exempt” vehicle verification stickers to owners of registered electric or hybrid vehicles in the state. Alberto Carmona Velazquez, head of SMAOT, highlighted that this collaboration is a key part of the state’s strategy to improve air quality and encourage sustainable vehicle adoption. Since 2018, SMAOT has issued over 3,000 of these certificates and stickers. This initiative aligns with global trends forecasting that electric vehicles will make up 30% of new car sales by 2026.
SOURCE: MEXICO INDUSTRY
NEWS BY STATE
CDMX
Clara Brugada, the elected head of government of Mexico City, met with business leaders to encourage collaboration for the city’s economic growth and welfare. She announced plans to establish a working group focused on urban planning and territorial organization to clarify investment opportunities. Brugada aims to make Mexico City more attractive to investors, creating better job opportunities. She proposed creating an agency dedicated to attracting and growing investments. Additionally, Brugada committed to enhancing public security and legal certainty to build investor confidence and protect businesses. The meeting included representatives from various business chambers and associations.
SOURCE: EL UNIVERSAL
STATE OF MEXICO
In the second quarter of 2024, the State of Mexico experienced a 4.08% increase in its Economically Active Population (EAP) and a 4.47% rise in the Employed Population compared to the same period in 2023, while the Unemployed Population decreased by 6.22%. The unemployment rate fell to 3.3%, down 0.4 percentage points from the previous year. The economic participation rate was 60.2% among the working-age population, an increase of 1.8 percentage points year-over-year. Salaried and subordinate workers made up 70.9% of the total employed population, while self-employed individuals accounted for 22.5%. Gender-wise, 72.3% of employed men and 68.8% of employed women were salaried workers, whereas self-employment represented 21.6% of employed men and 24% of employed women.
SOURCE: EL SOL DE TOLUCA
INVESTMENT NEWS
NORTH
VYNMSA
VYNMSA announced a 100 million dollars investment in Torreon, Coahuila, to build an industrial park.
KYUNGSHIN
The South Korean automotive manufacturer will create over 1,300 new jobs in the first phase of its plant located in Ciudad Obregon with an investment of 11 million dollars.
CENTRAL MEXICO FORD
Ford is investing 273 million dollars in its plant in Irapuato, Guanajuato, to produce the primary power unit for the Mustang Mach-E, boosting advanced technology for electromobility in Mexico.
SOURCES : MEXICO NOW, MEXICO INDUSTRY, CLUSTER INDUSTRIAL
LEGISLATIVE CHANGES AND INITIATIVES
ELECTROMOBILITY
• CHIHUAHUA: INITIATIVE TO ADD A SEVENTEENTH CLAUSE TO ARTICLE 5 OF THE LAW ON ECOLOGICAL BALANCE AND ENVIRONMENTAL PROTECTION OF THE STATE
Presented by: Local Representative Omar Bazan Flores (Chihuahua - PRI)
Purpose: To include the concept of Electromobility, defined as the use of all types of transport that employ electric propulsion technologies, such as bicycles, motorcycles, vehicles, among others. These vehicles may contain batteries for energy storage or may be directly connected to the power grid.
Status: 2024-08-28 - Initiative referred to the Committee for review. View File. View project details.
PRODENSA INSIGHTS
RECRUITMENT STRATEGIES FOR HIRING SOFTWARE ENGINEERS IN MEXICO
The blog discusses effective strategies for hiring software engineers in Mexico, starting with understanding local labor market conditions and leveraging local job boards and networks. It recommends offering competitive compensation packages tailored to local expectations and highlights the importance of legal compliance through tools like an Employer of Record (EOR). Protecting intellectual property is crucial, so companies should establish clear contracts. Providing support and resources to engineers is emphasized to boost engagement, productivity, and retention, ensuring a successful and sustainable hiring process in the Mexican tech industry.
EMBARKING ON YOUR DEDICATED SHELTER JOURNEY: TRANSITION WITH PRODENSA
The blog discusses the transition from a multitenant shelter to a dedicated shelter in Mexico, offering companies greater control, efficiency, and reduced risks. Key steps include incorporating a new legal entity, sub-leasing space, setting up a pilot production line, obtaining IMMEX certification, and transferring assets and employees. Prodensa provides expertise and support to navigate these complex processes, ensuring a seamless transition for manufacturers looking to optimize their operations in Mexico.
