GENERAL SITUATION IN MEXICO
Weekly Review I December 4, 2024
RELEVANT NEWS INDUSTRIES
AUTOMOTIVE
Stellantis announced that its Board of Directors accepted the resignation of Carlos Tavares as CEO and will undergo a reorganization of its leadership structure. The process of selecting a permanent CEO is expected to conclude in the first half of 2025, managed by a Special Committee of the Board. In the meantime, an Interim Executive Committee (IEC) will oversee operations, led by Chairman John Elkann, with key executives appointed to strategic roles across various departments. These include responsibilities for HR, engineering, manufacturing, regional operations, and more. Additionally, executive vice presidents have been appointed to support the IEC, ensuring stability and continuity during the leadership transition.
SOURCE: MEXICO INDUSTRY
Audi Mexico has begun building its High Voltage Battery Assembly Facility, set to produce key components for electric vehicles, with a capacity of over 300 batteries per day. This sustainable facility, covering 33,600 square meters, will use energy-saving technologies like daylight illumination and heat recovery systems. The project includes training 350 people in high-voltage handling and advanced tech tools, strengthening the automotive sector’s technical skills. Audi Mexico will become the first plant outside Germany to manufacture high-voltage batteries and modules, emphasizing Mexico’s strategic role in the growth of electric mobility.
SOURCE: MEXICO NOW
RELEVANT NEWS INDUSTRIES
The conference “China’s Perspective: Regulatory and Infrastructure Challenges for Electric Vehicles in the Mexican Market” discussed critical barriers to electric vehicle (EV) adoption in Mexico, with experts Gus Semaan and Pablo Gutiérrez Sánchez highlighting the complex regulatory environment and lack of infrastructure. Gutiérrez emphasized the complicated compliance process for launching vehicles, including environmental certifications and safety approvals, as well as the need for a dedicated standard for EV components. Semaan stressed the urgent need for standardized EV charging infrastructure and better coordination between government and industry to ensure seamless electromobility. The role of Chinese EV manufacturers, particularly Changan, was also discussed, with the company emphasizing Mexico as a regional hub and planning to expand its post-sales services. Both experts called for regulatory agility and infrastructure upgrades to accelerate Mexico’s transition to electromobility.
SOURCE: MEXICO BUSINESS NEWS
NATIONAL
NEW MINIMUM WAGE IN MEXICO FOR 2025
New Minimum Wage in Mexico for 2025
EFFECTIVE ON JANUARY 1, 2025
EFFECTIVE ON JANUARY 1, 2025
The National Commission for minimum wages in Mexico has reached an agreement. Starting January 1st the daily minimum general wage (DMGW) will be $278.80 pesos except for the northern border (NBMW) where the new minimum will be $419.88 pesos.
TheNationalCommissionforminimumwagesinMexicohasreachedan agreement.StartingJanuary1stthedailyminimumgeneralwage(DMGW) willbe $278.80pesos exceptforthenorthernborder(NBMW)wherethe newminimumwillbe $419.88pesos.
Aspartofthenationalstrategytorecoverthepurchasingpoweroftheminimum wages$12.85pesosforCentralMexicoand$19.36pesosarefirstaddedtothe2024 minimumwages(amountknownastheindependentrecoverymeasure,orMIRfor itsSpanishacronym)andthena 6.5%percentgeneralincrease.
As part of the national strategy to recover the purchasing power of the minimum wages $12.85 pesos for Central Mexico and $19.36 pesos are first added to the 2024 minimum wages (amount known as the independent recovery measure, or MIR for its Spanish acronym) and then a 6.5% percent general increase.
*Northern Border MimimmWage
*NORTHERN BORDER MINIMUM WAGE
NEWS BY STATE
BAJA CALIFORNIA
China’s Supply Chain Crucial for Baja California’s Industry: CCE
Approximately 50% of the imported inputs used in Mexican industries originate from China.Carlos Jaramillo Silva, president of the Business Coordinating Council (CCE) in Tijuana, stressed the critical importance of Chinese imports for the industrial sector in Baja California. He noted that about half of the materials imported into Mexico for manufacturing come from China, a trend that is also evident in the United States and Canada, albeit on a larger scale.
Jaramillo emphasized that North America lacks sufficient local production to meet its needs. For example, 80% of semiconductors, a critical component for various industries, are imported from Taiwan, South Korea, and China. He warned that imposing tariffs on these essential imports would harm the U.S. economy and disrupt supply chains.
SOURCE: EL SOL DE TIJUANA
SONORA
Sonora has become Mexico’s first state to receive certification for the Semiconductor Competency Standard, solidifying its leadership in the sector. Governor Alfonso Durazo announced the formalization of the Semiconductor Competency Management Committee, which is part of the Sonora Sustainable Energy Plan. This initiative is expected to drive economic development, create jobs, promote innovation, and enhance sustainability. Durazo stressed the importance of this committee in preparing Sonora for a future economy driven by semiconductors and electromobility. The program will also establish university collaborations to train specialists, positioning the state as a key player in the energy transition and semiconductor industries.
SOURCE: PROYECTO PUENTE
NUEVO LEON
The Chamber of the Transformation Industry (Caintra) of Nuevo León urged the Mexican government to focus on safeguarding the USMCA (TMEC) amid threats from U.S. President-elect Donald Trump to impose 25% tariffs on Mexican goods over issues like migration and drug trafficking. Máximo Vedoya, Caintra’s president and CEO of Ternium, emphasized that the USMCA, which replaced NAFTA in 2020, has significantly benefited all three member nations by boosting bilateral trade. He called for constructive dialogue to strengthen the trilateral relationship and prepare for the treaty’s review in 2026, noting opportunities for improvement. Vedoya dismissed any proposals to exclude Mexico from the agreement, highlighting the mutual advantages for Canada, the U.S., and Mexico. He also pointed out the region’s shared challenge of reducing economic dependency on Asia, given the significant trade deficits faced by both Mexico and the U.S. with Asian countries.
SOURCE: FORBES MEXICO
CHIHUAHUA
Governor Maru Campos of Chihuahua strengthened ties with Safran, a company with over 30 years of presence in the state, employing 9,000 locals and expanding with its 13th plant. During a meeting in Mexico City, Campos promoted initiatives like the MediChihuahua free healthcare program, childcare collaborations for female employees, and talent development efforts in partnership with the French Embassy, including aerospace-focused student exchanges. Safran executives expressed gratitude for the state’s incentives supporting their growth and expansion.
SOURCE: MEXICO NOW
NEWS BY STATE
GUANAJUATO
Panan, the industrial park and cluster development brand of Grupo ESFO, is expanding its presence in Mexico’s industrial market with the upcoming launch of Panan 3 in 2025. Located in the Bajío industrial corridor, where nearshoring has driven demand for industrial infrastructure, Panan 3 will offer tailored “turnkey projects” to attract foreign companies seeking quick and customized setups. Panan has already established two clusters near General Motors’ plant in Silao, Guanajuato, hosting major companies like Bimbo and automotive suppliers. The new project will feature high-quality infrastructure, including hydraulic concrete roads, utility networks, drainage, lighting, and security, all adhering to environmental and social responsibility standards. Focused on light and medium industries, Panan aims to strengthen the Bajío region’s competitiveness and attract foreign investment while emphasizing sustainability.
SOURCE: MEXICO INDUSTRY
QUERETARO
The Querétaro International Airport (AIQ) is marking 20 years by spearheading plans to become a certified full-cycle spaceport, fostering the growth of Mexico’s space industry while continuing its role as a hub for aerospace development. The airport has driven regional competitiveness, attracting companies like Safran and Bombardier, hosting an aeronautics university, and facilitating passenger and cargo operations, with a record 2 million passengers expected in 2023. Looking ahead, AIQ’s strategic plan envisions transforming into a sustainable, smart “airport city” by 2050, integrating advanced technology, industrial development, and community collaboration to strengthen its role as a national and international leader.
SOURCE: EL ECONOMISTA
NEWS BY STATE
CDMX
On November 26, 2024, Mexico City successfully secured long-term financing totaling 11.47 billion pesos for investment projects and partial refinancing. The financing includes three credit agreements with Citibanamex and Banobras. The first operation involves 3 billion pesos over 10 years with a fixed rate of 9.54%. The second and third operations, with Banobras, amount to 3.7 billion pesos over 20 years at a fixed rate of 10.52%, and 4.77 billion pesos over 10 years with a TIIE-based variable rate plus a 0.43% premium. These agreements, backed by the city’s economic performance and sound public finance management, reflect confidence in Mexico City’s fiscal health. The financing process has received approval from both the Federal and Mexico City Congresses, as well as the federal government, aligning with the authorized net debt ceiling for fiscal year 2024.
SOURCE: EXPANSIÓN
STATE OF MEXICO
In the last three years, Metepec, in the State of Mexico, has attracted 120 million dollars (around 2.4 billion pesos) in private investment. This growth is due to policies focused on transparency, accountability, security, and a stable political and social environment, initiated by Mayor Fernando Flores Fernández. Since 2022, over 2,000 new businesses have opened, creating more than 30,000 direct jobs. This development has been supported by a post-pandemic economic recovery program. Key factors include Metepec’s strategic location with access to major transportation routes, proximity to the International Airport and the Mexico-Toluca Interurban Train, and projects like the expansion of Galerías Metepec and the installation of Emerson and Atalait. The municipality has also boosted tourism and the local economy through initiatives such as the “Metepequeando” tourist corridor and traditional festivals, benefiting local artisans and fostering rapid business openings through technological innovation.
SOURCE: EDOMEX AL DÍA
INVESTMENT NEWS
CENTRAL MEXICO
AUDI
Audi Mexico is set to begin construction of its High-Voltage Battery Assembly Facility. The project includes a specialized team of 350 people trained in high-voltage handling.
PARKER
Parker Corporation inaugurated its new plant in Aguascalientes with an investment of $10 million dollars. The facility will create 200 jobs, producing insulation and materials for air conditioning systems.
SAFRAN
Safran inaugurated a new extension at its plant in Querétaro with an investment of $36 million dollars, creating 128 specialized jobs.
FUCHS
The German company Fuchs, a leader in the manufacturing of lubricants and specialized products for the automotive industry, will build its new facilities in the World Trade Center San Luis Potosí 2 (WTC 2). The new plant will involve an investment of $15 million.
SOURCES CLUSTER INDUSTRIAL , MEXICO INDUSTRY
LEGISLATIVE CHANGES AND INITIATIVES
LABOR
• INITIATIVE THAT AMENDS ARTICLE 123 OF THE CONSTITUTION
Presented by: Manuel Vázquez Arellano (MORENA)
Objective: Reduce the maximum workweek from 48 to 40 hours, with two days of rest for every five worked.
Status: Presented to the plenary of the Chamber of Deputies
ENVIRONMENT
• INITIATIVE TO REFORM THE SOLID WASTE LAW OF MEXICO CITY REGARDING SHARED RESPONSIBILITY FOR PLASTICS FROM LARGE GENERATORS
Presented by: Dip. Alberto Vanegas Arenas (MORENA)
Objective: Define “large generators” as entities producing 10 or more tons of waste annually. These generators will be responsible for managing and disposing of their waste until it is delivered to authorized sites, assuming full responsibility until proper disposal is ensured.
Status: Published in the Parliamentary Gazette
• INITIATIVE TO REFORM THE CIRCULAR ECONOMY LAW TO ESTABLISH THE CIRCULAR ECONOMY PLAN
Presented by: Dip. Manuel Talayero Pariente (PVEM)
Objective: Propose the Circular Economy Plan, introducing “Extended Responsibility” to ensure waste is managed through recovery and recycling. Manufacturers must submit management plans to the Secretariat and promote public awareness programs on waste separation.
Status: Published in the Parliamentary Gazette
LEGISLATIVE CHANGES AND INITIATIVES
FISCAL
• BILL AMENDING, ADDING, AND REPEALING VARIOUS PROVISIONS OF THE FEDERAL RIGHTS LAW
Presented by: Claudia Sheinbaum Pardo (MORENA)
Objective: Update payment rates for public services and national property use to reflect real impacts. Exempt civil protection telecom users and Afro-Mexican communities while promoting rights for seniors and disabled individuals. Clarify beach-related fees and adjust rates for mining, water, and telecom services.
Status: Passed, turned to the Executive
• FIRST READING REPORT ON THE FEDERAL REVENUE LAW FOR FISCAL YEAR 2025
Presented by: Joint Committees on Finance and Public Credit; Legislative Studies
Objective: The Federation is projected to receive total revenues of 9.3 trillion pesos, with 5.3 trillion from taxes and 1.2 trillion from financing. The Federal Executive is authorized to incur net domestic debt of 1.58 trillion pesos and external debt of up to USD 15.5 billion. Pemex and CFE are authorized to acquire domestic and external debt. Mexico City may incur net debt of 3.5 billion pesos for infrastructure projects. The law includes mechanisms for tax incentives, exemptions, surplus revenues, transparency, and fiscal efficiency.
Status: Presented to the plenary of the Senate
TRADE
• BILL TO AMEND ARTICLES 1°-C, 2°, AND 2°-A OF THE VALUE ADDED TAX LAW
Presented by: Sen. Gustavo Sánchez Vázquez (BC - PAN)
Objective: Introduce an 8% VAT rate for transactions in the border regions of Baja California, Baja California Sur, Quintana Roo, and parts of Sonora. The bill includes special VAT rates for food sales and financial factoring while maintaining a 16% VAT on property sales.
Status: Presented to the Plenary of the Senate
PRODENSA INSIGHTS
HOW NEARSHORING IS TRANSFORMING NORTH AMERICAN TRADE AND TRANSPORTATION
The nearshoring boom is reshaping global supply chains, and North America stands at the center of this transformation. With manufacturing shifting closer to home, trade within the region has reached unprecedented levels, driven by the U.S.-Mexico-Canada Agreement (USMCA) and trends like friendshoring and reshoring. This surge in activity is placing immense pressure on transportation networks, particularly key corridors like the NAFTA Superhighway.
In 2023, North American trade accounted for over 30% of U.S. international commerce, totaling $1.57 trillion in freight flows. Trucks alone moved nearly $1 trillion of goods, highlighting the critical role of surface transportation in sustaining regional connectivity. The question now is whether North America’s infrastructure can keep pace with growing demands while addressing sustainability and efficiency challenges.
This blog explores the strategic importance of North American transport corridors, the role of nearshoring in bolstering regional supply chains, and the investments needed to secure the future of trilateral trade. From public-private partnerships to cutting-edge infrastructure upgrades, discover how businesses and policymakers are building a more resilient, competitive North American economy.
PRODENSA INSIGHTS
NORTH AMERICA’S MANUFACTURING SURGE—DRIVING NEARSHORING SUCCESS
North American manufacturing is experiencing a transformative surge, fueled by the strategic advantages of nearshoring and the need for resilient supply chains. With a regional population of 500 million and a combined GDP nearing $30 trillion, the U.S., Canada, and Mexico are leveraging their unique strengths to create a trilateral trade powerhouse.
Recent data highlights the region’s robust growth in industries like automotive, electronics, and consumer goods, supported by integrated supply chains and a skilled workforce of over 30 million. The United States-Mexico-Canada Agreement (USMCA) further enhances this momentum, reducing trade barriers and fostering economic alignment across borders.
This blog explores North America’s manufacturing rise, recent investment highlights, and the comparative advantages driving regional competitiveness. Discover how nearshoring, supported by innovative shelter services and collaborative strategies, is reshaping the future of manufacturing and supply chains across North America.
