GENERAL SITUATION IN MEXICO
Weekly Review I September 11, 2024
RELEVANT NEWS INDUSTRIES
AEROSPACE
In June, Safran Aerosystems announced a €6 million investment to build its new Plant 6 at the Supra Industrial Park in Chihuahua. This facility will focus on manufacturing evacuation systems and aircraft seat components, creating 300 new jobs. Following this investment, Sebastien Weber and Jorge Acosta, president and CEO of Safran Aerosystems, met with Maru Campos, governor of Chihuahua, to confirm that the plant will begin operations in 2025, making it the 12th Safran plant in the region. The new facility will feature cutting-edge technology and sustainability measures, including 1,190 solar panels to reduce CO2 emissions by 585.5 tons annually. Safran currently employs 8,000 people locally, more than half of its workforce in Mexico.
SOURCE: MEXICO INDUSTRY
EV
In a significant step forward for sustainable mobility strategies in Mexico, NETA Auto Mexico has joined the Electro Mobility Association (EMA). This partnership, formalized at NETA Auto’s offices in Shanghai, reflects both entities’ commitment to accelerating the adoption of electric vehicles and promoting clean, accessible solutions to reduce the country’s carbon footprint. NETA Auto, a pioneer in electric vehicle innovation with over a decade of experience, is known for combining cutting-edge technology with smart services. By joining EMA, dedicated to advancing clean energy in Mexico’s mobility sector, NETA Auto aims to enhance electric vehicle adoption, improve charging infrastructure, and boost air quality, thus contributing to the fight against climate change and aligning Mexico with international sustainability standards.
SOURCE: MEXICO INDUSTRY
RELEVANT NEWS INDUSTRIES
EV
VEMO has announced a major step in advancing electromobility by installing five new electric vehicle charging stations in Nuevo Leon, a crucial region for nearshoring. These stations are strategically placed across key locations, including Torre Acacia and the Universidad Autonoma de Nuevo Leon, to support the adoption of electric vehicles and foster a more sustainable mobility ecosystem. Carlos Levy, Head of the VEMO Charging Network, emphasized that this expansion is pivotal for easing the transition to clean mobility. Users can access the network through the “Watts by VEMO” app, which facilitates finding and using charging points. This initiative aligns with Nuevo Leon’s growing role in electromobility, as highlighted by Secretary Ivan Rivas, who noted significant new investments in the sector, with over half related to electromobility.
SOURCE: MEXICO INDUSTRY
Japan is investing up to $2.4 billion to significantly boost its electric vehicle (EV) battery production, with the goal of increasing its annual capacity from 80 gigawatt-hours (GWh) to 120 GWh. The funding will support 12 projects related to storage batteries, including their parts and production equipment. Major companies such as Toyota, Nissan, Panasonic Holdings, Subaru, and Mazda are among the beneficiaries. Toyota will expand its production of solid-state and prismatic batteries, while Nissan will focus on lithium-iron-phosphate batteries for mini-vehicles. Panasonic Energy will collaborate with Subaru to build a new plant for cylindrical lithium-ion batteries and will also supply batteries to Mazda. This investment is part of Japan’s broader strategy to enhance its battery supply chain and competitive edge in the industry.
SOURCE: MEXICO BUSINESS NEWS
RELEVANT NEWS
BUSINESS CHAMBERS
INDEX
The Maquiladora and Export Manufacturing Industry Association (INDEX) in Ciudad Juarez hosted the Business Meeting 2024, a key networking event aimed at strengthening business connections within the manufacturing sector. The event allowed suppliers and buyers to engage directly, fostering new business and collaborative opportunities. Sergio Colin, president of INDEX Juarez, emphasized the importance of such meetings for maintaining a competitive supply chain and promoting industrial growth in Juarez. Additionally, Mayra G. Maldonado from the Hunt Institute delivered a lecture on recent economic trends in Mexico and the U.S., offering valuable insights into challenges and opportunities in the border region and highlighting the need for binational collaboration for economic development.
SOURCE: MEXICO NOW
FEMIA
The Mexican Federation of the Aerospace Industry (FEMIA) has launched a self-diagnosis platform designed to enhance how companies engage with the aerospace sector. This tool helps businesses from various sectors, including those already in aerospace, evaluate their strengths and weaknesses in areas critical to the industry. By identifying gaps in compliance, technology, and processes, the platform encourages greater sector participation and improves supplier-buyer matching. Carlos Robles, president of FEMIA, highlighted that the platform will strengthen the supply chain and boost integration within the aerospace sector. Overall, it aims to support Mexico’s aerospace industry growth by fostering sectoral collaboration and improving market entry for companies.
SOURCE: MEXICO NOW
NEWS BY STATE
BAJA CALIFORNIA
Kurt Honold Morales, Secretary of Economy and Innovation, participated in a panel on “Local Industrial Policy in a Global Environment,” organized by the Mexican Institute for Competitiveness (IMCO). He highlighted Baja California’s strategy of linking education with the business sector to develop talent for innovative technological processes. He also discussed infrastructure projects to boost competitiveness, including energy and water supply improvements, logistics enhancements like border crossings and the Punta Colonet port with its planned railway, and the importance of upholding the rule of law. Honold Morales praised the collaborative “triple helix” approach and initiatives like the Semiconductor Training Program in partnership with Santander Universidades, EMTECH, and Arizona State University. The panel, part of the “Industrial Policy for a New Administration” event, focused on enhancing state efforts to integrate local companies into global value chains. IMCO emphasized that while Mexico is the world’s twelfth-largest economy and a major global exporter, implementing an industrial policy could further strengthen manufacturing and economic growth.
SOURCE: INDUSTRIAL NEWS BC
NEWS BY STATE
SONORA
Ahead of Sonora Governor Alfonso Durazo Montaño’s Third Government Report, it was announced that between 2022 and 2024, 13 strategic projects were initiated with a total investment of 3.494 billion pesos. Completed projects include the modernization of the Guaymas-Chihuahua highway, the rehabilitation of a multipurpose dock, a refrigerated warehouse, new railway tracks, and the restoration of various local areas. Governor Durazo highlighted the modernization of the Port of Guaymas as a pivotal development, transforming it into a top-tier logistics hub that will enhance economic growth, tourism, connectivity, and strategic international partnerships. The project, a collaboration between the Sonora government, the Guaymas National Port System Administration (ASIPONA), and the Navy Secretariat (Semar), aims to upgrade port infrastructure with advanced technology, promoting efficient global connectivity, environmental protection, and job creation.
SOURCE: EL ECONOMISTA
NEWS BY STATE
NUEVO LEON
Nuevo Leon is emerging as a strong candidate for semiconductor supply chain opportunities in North America due to its proximity to Samsung’s future chip plant on the Texas border, according to a report by the Mexico-United States Foundation for Science (FUMEC). The July 2024 study, funded by the U.S. Agency for International Development (USAID), highlights Nuevo Leon’s robust industrial base in automotive, aerospace, and electronics sectors, bolstered by major investments from companies like Ternium and Kia Mexico, and potential future investment from Tesla. The state hosts 41 supply chain companies, including Sanmina, Celestica, Jabil, and Lenovo. Gustavo Garcia from the Monterrey IT and Communication Technologies Cluster (Csoftmty) emphasized that Nuevo Leon is advancing in semiconductor technology development, aiming to position Mexico as a semiconductor producer.
SOURCE: EL ECONOMISTA
NEWS BY STATE
COAHUILA
The 3.0-liter Hurricane High Output (H/O) engine powering the new 2025 Ram 1500 Tungsten has been named one of the top 10 engines and propulsion systems of 2024 by Wards. This accolade highlights the Stellantis engine plant in Coahuila, Mexico, where the engine is produced. This recognition marks Stellantis’s eighth consecutive year on Wards’ list, reinforcing its innovation leadership in the automotive industry. The Hurricane engine, which delivers 540 horsepower and 521 lb-ft of torque, provides the Ram 1500 Tungsten with a unique blend of power, fuel efficiency, and performance both on and offroad. Micky Bly of Stellantis praised the engine for enhancing the driving experience of pickup users. The Hurricane engine is manufactured at the Norte Engine Plant in Ramos Arizpe and is noted for its strength and contribution to a cleaner, more efficient industry, aligning with Stellantis’s Dare Forward 2030 plan for sustainable mobility.
SOURCE: MEXICO INDUSTRY
NEWS BY STATE
GUANAJUATO:
Last Thursday, the “Nearshoring Forum 2024: Challenges and Opportunities for Mexico and Guanajuato” was inaugurated in Leon, Guanajuato, organized by the Italian Exhibition Group and Deutsche Messe. The forum focused on critical topics such as job creation, foreign investment, infrastructure, and development, aiming to transform the global business landscape. The first panel discussed “The Role of Geopolitics in Nearshoring: Opportunities and Challenges of the USMCA for Regional Development,” featuring Alejandro Hernandez Fonseca from Guanajuato’s Economic Development Secretariat, Esau Garza de Vega from Aguascalientes, and Miguel Leaman, president of Agencia Por Mexico. Garza de Vega emphasized the importance of investing in talent development for youth. The second panel addressed logistics and infrastructure challenges, with contributions from Alfonso Valdes of the Maquiladora and Export Manufacturing Industry Association, Hector Lopez Santillana of Guanajuato Puerto Interior, and Samuel Campos of NEWMARK. The forum also highlighted the role of innovation and digital transformation in supporting nearshoring. Attendees included executives, government representatives, academics, and students.
SOURCE: MEXICO INDUSTRY
NEWS BY STATE
QUERETARO
The state project to establish two energy substations is currently awaiting the approval and coordination of the new federal administration, according to Mauricio Reyes Caracheo, Director of the Queretaro State Energy Agency (AEEQ). While the incoming administration under President-elect Claudia Sheinbaum has shown positive feedback, the project must be reviewed and aligned with the new management of the Federal Electricity Commission (CFE). Reyes Caracheo emphasized the need for good coordination with
CFE to avoid overlapping with federal infrastructure programs. The AEEQ’s role is to create favorable conditions for investment in Queretaro without directly handling energy distribution or sales, which remains the responsibility of the CFE. The state initially aimed to start construction of the substations in early 2024, but the timeline is now contingent on further discussions and approvals with CFE.
SOURCE: EL ECONOMISTA
NEWS BY STATE
CDMX
Businessman Adal Ortiz Avalos led a meeting with Manola Zabalza Aldama, the future Secretary of Economic Development of Mexico City, to strengthen collaboration between the private sector and the upcoming government. Entrepreneurs from various sectors, including real estate, finance, and tourism, discussed challenges and solutions for the city. This meeting marked the first step toward an alliance proposed by the elected Head of Government, Clara Brugada. Zabalza emphasized the importance of promoting investment, creating well-paying jobs, and ensuring tax compliance to fund social programs. Ortiz Avalos highlighted the need for a one-stop shop for entrepreneurs, which Zabalza committed to advancing.
SOURCE: EL FINANCIERO
STATE OF MEXICO
The State of Mexico registered 73,494 new jobs from September 2023 to July 2024, making it the top source of employment in the country, with 21.9% of the national total. It experienced a 4.3% growth, surpassing the national average of 2.0%, with 334,913 formal jobs. Key sectors contributing to this growth were business, personal and household services, transportation, and commerce. In the first seven months of 2024, the state ranked second in job creation, contributing 18.4% of the national total with 56,574 new jobs. Over the year, it was the second-highest job generator, with 75,716 new jobs, or 17% of the national total.
SOURCE: EXPANSION
INVESTMENT NEWS
NATIONAL
GRUPO AEROPUERTUARIO DEL PACIFICO
The Pacific Airport Group announced an investment of $2.6 billion dollars for the modernization and expansion of its 12 airports in Mexico during the 2025-2029 five-year period.
DIDI
The DiDi platform announced its commitment to more sustainable mobility in Mexico, stating that the company will invest 50 million dollars to incorporate 100,000 electric vehicles in the country by 2030.
SOURCES : MEXICO NOW, MEXICO INDUSTRY, CLUSTER INDUSTRIAL
LEGISLATIVE CHANGES AND INITIATIVES
ENVIRONMENT
• SAN LUIS POTOSI: DECREE ADDING ARTICLE
36 BIS TO THE ENVIRONMENTAL LAW OF THE STATE.
Presented by: Executive Branch of the State of San Luis Potosi
Purpose: To fulfill the objectives outlined in the Law regarding the establishment and management of protected natural areas, a subdivision will be carried out to identify and delineate portions of the territory based on their biological, physical, and socioeconomic elements. These elements constitute an integral and dynamic framework, so when the territorial delimitation of activities in protected natural areas is made, it will be done through the following zones and their respective subzones, according to their management category.
Status: 2024-09-05 - Published in the Official Gazette.
LEGISLATIVE CHANGES AND INITIATIVES
LABOR
• SECTION VII OF ARTICLE 74 OF THE FEDERAL LABOR LAW
Presented by: Joint Commissions of Labor and Social Welfare; Legislative Studies, Second.
Purpose: Establishes October 1st as a mandatory rest day every six years, when it corresponds to the transfer of Federal Executive Power.
Status: 2024-09-10 - Published in the Parliamentary Gazette.
• BAJA CALIFORNIA: RESOLUTION TO IMPLEMENT AN OPEN PARLIAMENT ON WORKING CONDITIONS
Presented by: State Representative Liliana Michel Sanchez Allende (BC - MORENA)
Purpose: Agree on holding Open Parliament working groups to analyze and discuss the main points for drafting a proposal regarding: Classification of crimes against labor and social welfare, as well as companies that leave the state without covering labor debts; Classification of workplace violence; Regulation of criminal liability for legal entities; Regulation of civil liability for moral damages due to workplace risks; Prevention of the disappearance of persons in workplaces.
Status**: 2024-09-09 - Approved, Communicate. View File.
PRODENSA INSIGHTS
TRADE COMPLIANCE FOR AEROSPACE MANUFACTURING IN MEXICO
The Mexican aerospace industry has seen significant growth, becoming a vital part of the global aviation market. This expansion has contributed to the nation’s economic development, accounting for 29% of Mexico’s exports and employing over 60,000 workers directly. However, with this growth comes increased complexity in international trade compliance. Aerospace companies must navigate evolving trade policies, tariffs, and export controls to remain competitive.
Key programs like the IMMEX Program and Value-Added Tax (VAT) Certification are crucial for manufacturers in Mexico. IMMEX allows duty deferrals for imported goods used in manufacturing for export, providing tax benefits for maquila and shelter companies. The VAT Certification offers exemptions on import taxes for companies that export finished goods within a set timeframe, reducing financial strain on manufacturers. Additionally, the Manufacturing Certificate enables duty reductions on imports of raw materials for the aerospace sector, further streamlining costs.
TIPS FOR TRANSITIONING FROM MULTITENANT TO DEDICATED SHELTER
Transitioning from a multitenant shelter to a dedicated shelter in Mexico offers companies greater control, efficiency, and reduced risks. However, this process can be complex and requires a clear strategy. Effective communication is key, involving all stakeholders such as corporate leaders, HR, legal teams, and local authorities. Managing compliance, particularly trade compliance, is crucial during this transition, from asset transfer strategies to pilot production lines for IMMEX approval.
Our expert tips:
• Maintain an Effective Communication Strategy
• Take Special Care of Employees
• Reevaluate and Optimize Policies and Procedures
Read the blog for expert tips from our business advisors and operational experts from Human Resources, International Trade Compliance, Project Management and Finance.