GENERAL SITUATION IN MEXICO
Weekly Review I October 2, 2024
RELEVANT NEWS INDUSTRIES
EV
DiDi has joined the Electric Mobility Association (EMA) to promote electric mobility in Mexico, announcing plans to add 100,000 electric vehicles to its fleet by 2030 with an investment of 1 billion pesos, positioning itself as the operator of the largest electric vehicle fleet in Latin America. Eugenio Grandio, president of EMA, highlighted this membership as a significant milestone in advancing key goals such as reducing emissions, developing regulatory frameworks, and promoting economic growth. To achieve its target, DiDi is focusing on four pillars: ensuring affordable electric vehicles, developing nationwide charging infrastructure, facilitating financing and insurance options, and collaborating with government authorities. Juan Andrés Panamá, General Director of DiDi in Mexico and Latin America, emphasized the partnership with EMA as a step towards a sustainable future, technological innovation, and improved air quality, aiming to create a beneficial mobility ecosystem for future generations.
SOURCE: MEXICO BUSINESS NEWS
VEMO, a Mexican cleantech company focused on clean mobility, has partnered with GAC Motors Mexico to provide public charging infrastructure for the Chinese automaker’s electric vehicles. GAC recently announced the introduction of five electric and two plug-in hybrid models in Mexico, reinforcing its commitment to accelerate electric mobility adoption in the country. The partnership allows GAC users to access the VEMO Charging Network through the “Watts by VEMO” app, which helps locate charging stations, types of chargers, payment methods, and provides real-time support. Roberto Rocha, VEMO’s CEO, emphasized that this collaboration is a step toward facilitating the transition to clean mobility, while GAC’s President Rafe Huang announced that the first 100 customers would receive free charging for a year at any of the 550 VEMO charging stations across the country, highlighting their shared commitment to innovation and sustainability.
SOURCE: MEXICO INDUSTRY
RELEVANT NEWS INDUSTRIES
AEROSPACE
The Mexican Federation of the Aerospace Industry (Femia), with support from the Ministry of Foreign Affairs, signed a Memorandum of Understanding (MoU) with Brazilian aircraft manufacturer Embraer to enhance integration between the two countries. Francisco Gomes Neto, President and CEO of Embraer, expressed that the MoU promotes new business opportunities and strategic cooperation within the Mexican aerospace industry. The agreement aims to identify potential joint project areas, including collaboration with the country’s defense cluster. Embraer has had a presence in Mexico for over 40 years, operating a fleet of over 100 commercial, executive, and defense aircraft. The MoU was signed during the Mexico-Brazil Business Forum in Mexico City and was attended by key officials, including Luis Lizcano, executive president of Femia. Embraer, founded in 1969, has delivered over 9,000 aircraft and operates across various regions, providing design, manufacturing, and post-sale support services.
SOURCE: MEXICO INDUSTRY
The Queretaro International Airport (AIQ) is pursuing certification to become the first spaceport in Latin America, with an anticipated investment of US$5 billion once approved. Marco Antonio del Prete Tercero, head of the Ministry of Sustainable Development (SEDESU) of Queretaro, explained that AIQ will utilize a horizontal launch approach, allowing spacecraft to take off and land horizontally, which is more energy-efficient compared to traditional vertical launches. While the certification process will take time, it is essential for determining the project’s feasibility, requiring evaluations from the FAA and the Mexican Federal Civil Aviation Agency (AFAC). The establishment of a spaceport is expected to bring economic benefits to Queretaro by attracting new industries and capitalizing on emerging markets in the democratizing space exploration industry.
SOURCE: MEXICO BUSINESS NEWS
NEWS BY STATE
BAJA CALIFORNIA
Industrial leaders in the export manufacturing sector are seeking legal and fiscal certainty with the implementation of the Judicial Reform to retain investments. Federico Serrano, newly appointed president of INDEX Zona Costa BC, emphasized that businesses need efficiency and certainty, which have been disrupted by recent constitutional changes. The maquiladora industry council will negotiate to ensure legal and fiscal clarity, especially regarding aspects to be addressed in judicial processes. Serrano noted that the sector has reduced about 30,000 jobs due to global consumer contraction, a trend expected to remain stable until the end of the year. He also highlighted that the upcoming U.S. presidential elections are causing investor uncertainty, but he remains optimistic that trade relationships through the Free Trade Agreement will sustain stability.
SOURCE: INDUSTRIAL NEWS BC
SONORA
Prodensa participated in an event hosted by Index Sonora in Hermosillo, focused on nearshoring trends and outlooks as 2024 approaches its end. Key members of Prodensa’s leadership, including President Marco Kuljacha, VP of Human Resources Álvaro García, and VP of Consulting Kurt Schmidt, served as keynote speakers, offering valuable insights into the challenges and opportunities shaping the nearshoring landscape. The event, organized by Jesús Gámez, President of Index Sonora, provided an excellent platform for industry leaders to connect and discuss the future of manufacturing and supply chain operations in Mexico.
SOURCE: INDEX SONORA / PRODENSA
NEWS BY STATE
NUEVO LEON
Governor Samuel García Sepúlveda of Nuevo León and Investment Undersecretary Emmanuel Loo met with executives from Hofusan Industrial Park, who announced investments exceeding $1 billion to date, with plans for an additional $1 billion expansion. The park, which houses 40 companies, including major firms like Manwah and Hisense, has benefited from improved security and road infrastructure that attracts significant investments in the automotive, furniture, and appliance sectors. César Santos, Chairman of the Board, highlighted the importance of infrastructure improvements, such as expanding local roads to enhance trade connections. García emphasized Nuevo León’s leadership in attracting Foreign Direct Investment (FDI), totaling around $68 billion, which has created 220,000 jobs and captured 76% of nearshoring activity in Mexico.
SOURCE: EL ECONOMISTA
CHIHUAHUA
Luis Rafael Méndez Jaled, National President of the Mexican Chamber of the Construction Industry (CMIC), announced the presentation of a package of 650 infrastructure needs across Mexico, 52 of which are in Chihuahua. These projects include highway construction and maintenance, such as routes from Chihuahua to Ciudad Juárez and Parral, as well as water infrastructure projects and sewer system improvements. Additionally, railroad projects and energy station construction in Ciudad Juárez were highlighted. Méndez Jaled emphasized the construction sector’s key role in Mexico’s economic development, contributing 7% to GDP and generating over 5 million jobs. He also praised Chihuahua’s economic dynamism, noting its 82% GDP growth over the last 20 years. The 2024 National Construction Fair in Chihuahua was recognized as a vital industry event for sharing experiences and strategies.
SOURCE: EL HERALDO DE CHIHUAHUA
NEWS BY STATE
AGUASCALIENTES
The Industrial Cluster of Aguascalientes (CLIA) held its 9th member assembly, where representatives from the local industry emphasized the importance of maintaining effective communication between the government and industrial groups to achieve sustainable economic development. Esaú Garza de Vega, head of the Aguascalientes Economic Development, Science, and Technology Secretariat, highlighted the need to strengthen the competitiveness of local companies through the adoption of new technologies and innovation to better face global challenges. Key topics discussed included the presentation of member company MEXSTAMP and its automotive parts stamping expertise, the benefits of CONALEP’s dual education model for industrial education, and the EFIARTES program, which allows businesses to fund cultural projects as part of their income tax payments. Garza de Vega noted that open dialogue enables informed decisions for sustainable economic development, aligning resources with the real needs of the industry and society. The assembly also stressed the importance of promoting high-value job creation to enhance the region’s economic stability.
SOURCE: MEXICO INDUSTRY
SAN LUIS POTOSI
San Luis Potosí is in the final stages of being considered as the location for Changan Motors’ new assembly plant, alongside the state of Guanajuato. The final decision is expected in November 2024, but San Luis Potosí is seen as a highly favorable option due to its world-class infrastructure, skilled workforce, strategic location, and availability of land for large projects. The state’s Economic Development Secretary, Salvador González Martínez, emphasized that Changan’s potential arrival, along with investments from companies like BMW and General Motors, would strengthen San Luis Potosí and the Bajío region as an industrial hub. The investment would create thousands of jobs, attract suppliers, and enhance the supply chain, further establishing the state as a key player in the national and international automotive industry.
SOURCE: MEXICO INDUSTRY
NEWS BY STATE
CDMX
Mexico City has established itself as the leading economy in the country, with foreign direct investment (FDI) reaching a historic $59.42 billion during the current administration, accounting for 29.7% of the national total. Fadlala Akabani Hneide, Secretary of Economic Development (Sedeco), highlighted this growth as a sign of investor confidence and the government’s commitment to a supportive business environment. The city contributes 15% of national wealth, with an annual economic growth rate of 3.7% in 2023 and a recorded 2.3% growth in the first quarter of 2024, driven by commerce, construction, and primary activities. In 2023, Mexico City had the highest per capita GDP in the country at 505,295 pesos and exhibited significant economic diversification across 941 sectors. This positive economic climate is attributed to sustainable environmental practices, reduced wage gaps, good educational access, and strong connectivity, with 90% of the local GDP coming from commercial activities, particularly retail. Since 2019, 101,087 new businesses have been established, generating 1 million jobs and significantly reducing unemployment. Additionally, from 2019 to 2022, 526,000 people were lifted out of poverty, lowering the poverty rate from 30% to 24%. Akabani also noted efforts to unify commercial and service frameworks across the city and the introduction of the first Circular Economy Law.
SOURCE: EL ECONOMISTA
STATE OF MEXICO
Germán Jalil Hernández, president of the Business Coordinating Council of the State of Mexico (Edomex), affirmed the sector’s commitment to meeting tax obligations and called for increased government attention to the 218 industrial parks, which are suffering from damaged streets due to rain. He expressed confidence in the business community’s compliance and emphasized the need for collective effort to benefit society. Hernández highlighted that tax payments support infrastructure, education, and health services, underscoring the demand for efficient and transparent governance.
SOURCE: LA JORNADA
INVESTMENT NEWS
NATIONAL MICROSOFT
Microsoft announced an investment of 1.3 billion dollars for the next three years in Mexico. This investment is focused on strengthening Cloud and Artificial Intelligence infrastructure in the country and promoting the adoption of emerging technologies.
CENTRAL MEXICO
JAC
The Giant Motors plant located in Ciudad Sahagún, Hidalgo, inaugurated its new production lines. This represents an investment of 54.2 million dollars, generating 1,360 direct and indirect jobs.
DONGFENG
The establishment of this SKD plant in Jalisco is another step in Dongfeng Trucks’ strategy, aiming to facilitate local manufacturing. Dongfeng Motor Corporation plans to create 400 jobs by 2025.
NORTH
EATON
Eaton held the inauguration of a new manufacturing plant in Ciudad Juárez, Chihuahua. This expansion is part of a 150-million-dollar investment announced in 2023.
FIBRA PROLOGIS
FIBRA Prologis, a real estate investment trust, has acquired an industrial park located in Mexico City. The transaction, valued at 190.1 million dolalrs, includes eight buildings covering 1.5 million square feet of industrial space.
SOURCES : MEXICO NOW, MEXICO INDUSTRY, CLUSTER INDUSTRIAL
PRODENSA INSIGHTS
REVISITING THE USMCA IN 2026: ANALYZING TRUMP & HARRIS TRADE POLICIES
1. The USMCA Review Will Be Influenced by the 2024 Elections
The outcome of the 2024 U.S. elections will significantly impact the USMCA review process. A Trump administration is likely to take a more protectionist approach, while a Harris administration is expected to prioritize cooperation and multilateralism.
2. China’s Influence Will Be a Key Focus
Both the U.S. and Mexico are concerned about China’s growing economic influence in Mexico. The review is expected to address this issue, potentially leading to stricter enforcement of trade provisions and monitoring of Chinese investments.
3. The USMCA Is Crucial for Mexico’s Economy
Mexico has benefited significantly from the USMCA, and its economy is closely tied to the agreement. However, challenges remain, and the review will be an opportunity to address these issues and ensure the continued success of the trade deal.
THE STRATEGIC ROLE OF R&D IN ENHANCING MANUFACTURING IN MEXICO
Mexico’s evolving industrial landscape has transformed it into a global leader in both manufacturing and innovation. The country’s strategic location, skilled workforce, and favorable trade agreements make it an attractive destination for businesses seeking to establish or expand operations.
Key Takeaways:
• Mexico’s Manufacturing Excellence: As a leading manufacturing hub, Mexico offers competitive labor costs, proximity to the U.S. market, and a robust supply chain infrastructure.
• Growing R&D Sector: Mexico’s R&D sector is experiencing rapid growth, with focus on areas like biotechnology, pharmaceuticals, automotive technology, and renewable energy.
• Investment Opportunities: Mexico’s balanced ecosystem of production and innovation presents numerous opportunities for businesses interested in manufacturing, R&D, and technological advancements.