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GENERAL SITUATION IN MEXICO

Weekly Review I January 15, 2025

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RELEVANT NEWS PRESIDENT CLAUDIA SHEINBAUM PRESENTS PLAN MEXICO, WHICH INCLUDES AN INVESTMENT PORTFOLIO OF $277 BILLION. President Claudia Sheinbaum unveiled “Plan Mexico,” a vision for national development focusing on 13 ambitious goals to reduce poverty and inequality, aiming to make Mexico the best country in the world. This plan includes a $277 billion portfolio of national and foreign investments spanning approximately 2,000 specific projects. Presented at the National Museum of Anthropology, Sheinbaum emphasized the plan’s aim to provide clarity, direction, and a long-term vision for the nation.

Key goals include: • Advancing Mexico’s global economic ranking from 12th to 10th.

• Raising investment-to-GDP ratio above 25%.

• Creating 1.5 million new jobs.

• Increasing domestic production and procurement to 50% in key industries.

• Boosting local content by 15%.

• Prioritizing local suppliers for 50% of public procurement.

• Developing vaccines in Mexico.

• Reducing investment-related bureaucracy from 2.6 years to 1 year.

• Training 150,000 additional professionals and technicians annually.

• Promoting environmental sustainability in business.

• Expanding financing access to 30% of SMEs. • Becoming a top-five global tourist destination.

• Decreasing poverty and inequality.

Sheinbaum also announced a detailed timeline for implementation, beginning January 2025, including monthly monitoring meetings, decrees for business relocation, investment incentives, and initiatives for energy sustainability and vocational education. The plan reinforces regional integration under the USMCA trade agreement and aims to position Mexico as a competitive alternative to Chinese exports.

Officials highlighted the strategic importance of reducing dependency on Chinese trade by enhancing North American economic integration, which could significantly boost Mexico’s GDP. SOURCE: GOVERNMENT OF MEXICO

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RELEVANT NEWS INDUSTRIES

EV Zacua, the Mexican electric car manufacturer, is set to launch five new models in the near future. CEO Nazareth Black announced that these launches will come seven years after the company introduced two versions of its city car. Following the quick sale of 100 units from the launch edition, Zacua began developing new models to cater to national consumer demand. Two of these new models, a redesigned version of the Zacua city car and a last-mile delivery truck, will be released in 2025. Black emphasized the company’s focus on addressing real-world challenges, such as urban mobility and last-mile delivery, which contribute to pollution.

The light-duty truck will have a load capacity of up to 4 tons and will feature innovative materials.

SOURCE: MEXICO NOW

AEROSPACE President Claudia Sheinbaum’s administration aims to position Mexico as a global aerospace leader through ambitious goals, including passing the Outer Space Law (2025), launching the first Latin American space mission (2027), deploying a geostationary satellite (2028), and entering the top 10 in aerospace production value by 2030. The $277 billion “Plan Mexico” emphasizes boosting local content in exports, developing a national satellite constellation, and enhancing the supply chain for critical aerospace components. With 14% annual growth, the industry generates 60,000 jobs and ranks 12th globally, but challenges like funding and collaboration must be addressed to realize these objectives.

AUTOMOTIVE BYD closed 2024 with 40,000 units sold in Mexico, positioning itself as one of the fastest-growing automotive brands in the region. The company plans to double its sales to 80,000 units in 2025 and open 30 more dealerships. Despite falling short of its initial target of 50,000 units, BYD’s sales surged from nearly 500 units in January to over 8,000 by December. The company opened 50 dealerships in 2024 and aims for 80 by the end of 2025, with some locations selling up to 150 vehicles per month. BYD also plans to establish dealerships in new cities and is on track to build a manufacturing plant in Mexico to support its expansion, despite facing political challenges.

SOURCE: MEXICO NOW

SOURCE: MEXICO BUSINESS NEWS

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NEWS BY STATE

BAJA CALIFORNIA Index Mexicali called on various productive sectors to form a unified front to promote practices aimed at reducing pollution. President Salvador Maese Barraza emphasized the need for collaboration between private industry, government, NGOs, and the community to address environmental challenges comprehensively. Index Mexicali is committed to adhering to regulatory standards, promoting environmental education, updating regulations, and implementing sustainable practices, such as emissions control technologies and proper material handling. The association also supports efforts like air quality monitoring and public awareness campaigns, recognizing that pollution impacts everyone and requires bold, effective action to safeguard public health and the environment.

SOURCE: MEXICO INDUSTRY

SONORA The government of Sonora is visiting Taiwan this week to negotiate the establishment of a Foxconn facility in Ciudad Obregón for manufacturing electric vehicle batteries. Governor Alfonso Durazo emphasized Foxconn’s global prominence, with over a million employees worldwide, and its interest in investing in the state. During the visit, the governor will sign a memorandum of understanding to formalize progress on the project.

Highlighting Sonora’s skilled workforce and strategic position for advanced technologies, the initiative aims to position the state as a leader in electromobility, boost its economy, and generate specialized jobs while attracting global investment.

SOURCE: MEXICO INDUSTRY

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NEWS BY STATE

NUEVO LEON Governor Samuel Alejandro García Sepúlveda of Nuevo León announced that the state will host the 2025 Global Transportation & Innovation Summit, Latin America’s largest electromobility event. Organized by the State’s Secretariat of Economy, Nuevo León 4.0, and the Automotive Cluster of Nuevo León (CLAUT), the event will take place on June 4-5 at Cintermex. The summit will bring together companies, academics, experts, and governments to explore the latest advancements in the field. Governor García highlighted the economic impact of electromobility and the automotive industry, noting Nuevo León’s leadership in employment and investment within these sectors.

SOURCE: GOVERNMENT OF NUEVO LEON

CHIHUAHUA To prepare future professionals and enhance their skills, Siemens provided 200 licenses for its advanced software platform, Totally Integrated Automation Portal (TIA Portal), to higher education institutions in Chihuahua. TIA Portal, used globally to optimize industrial automation processes, offers a unified engineering environment for system design, programming, and maintenance.

The Instituto de Apoyo al Desarrollo Tecnológico (Inadet) will train university instructors on the software through High-Technology Training Centers (Cenaltec). This initiative will equip students with essential industry skills like system integration, problem-solving, and process improvement, improving their employability. Benefiting institutions are located in Chihuahua, Parral, Cuauhtémoc, Delicias, Juárez, Camargo, and Nuevo Casas Grandes. Jesús García López, Subsecretary of Innovation and Competitiveness, highlighted the importance of this initiative in preparing students for Industry 4.0 and future technological advancements.

SOURCE: GOVERNMENT OF CHIHUAHUA

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NEWS BY STATE

GUANAJUATO Guanajuato is focusing on energy self-sufficiency with a portfolio of 15 projects that will generate 1,227 MW of electricity for domestic and industrial use, as well as 5,530 tons of green hydrogen, crucial for the transition to clean energy. These initiatives target renewable technologies such as photovoltaic solar, combined cycle, hydroelectric, wind energy, and green hydrogen production. The state is committed to sustainability and efficient energy use, with municipalities like San Felipe, San Luis de la Paz, and Irapuato identified as prime locations for these projects. The state’s economy, led

by Claudia Cristina Villaseñor Aguilar’s Ministry of Economy, aims to attract private investments to foster job creation and capitalize on nearshoring opportunities, keeping Guanajuato competitive for industrial businesses. With a reliable connection to the national grid, the state is enhancing its energy infrastructure to support industrial and commercial operations while reinforcing its commitment to economic growth, social well-being, and sustainability.

SOURCE: CLUSTER INDUSTRIAL

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NEWS BY STATE

STATE OF MEXICO

CDMX Grupo GRISI has inaugurated a new production plant in the Vallejo Industrial Zone, Mexico City, with an investment exceeding 200 million pesos. The facility will generate over 400 direct jobs and handle 40% of the company’s total production, including shampoos, creams, liquid soaps, and pet products. Equipped with high-end European technology, the plant will produce more than 40 million products annually, featuring 14 production lines and batch capacities of up to 20 tons. Sustainability initiatives include a system that reduces purified water consumption by 30%, electric vehicle charging stations, and planned solar panel installation by late 2025. The plant also aims to foster professional development through internship programs for university students in areas such as manufacturing, quality control, and product development.

This project highlights Grupo GRISI’s commitment to innovation, sustainability, and social impact, contributing to Mexico’s economic and professional growth.

SOURCE: MUNDO EJECUTIVO

The State of Mexico (Edomex) has attracted an investment of 1.1 billion pesos from Bayer Mexico under the “Project Spectre.”

Announced by Governor Delfina Gómez, the project will expand pharmaceutical production and establish a Global Innovation Excellence Center in Lerma. The initiative is expected to create 250 temporary and 50 permanent jobs, in addition to the 600 current positions, strengthening Edomex’s leadership in private investment and formal job creation. Bayer’s contribution aligns with the state’s prominent role in the chemical-pharmaceutical sector, home to 19% of Mexico’s 7,252 economic units in the industry and employing over 49,800 individuals. Governor Gómez highlighted that Edomex created 79,328 new jobs in 2024, marking a 4.4% increase and securing first place nationwide in employment growth.

Economic Development Secretary Laura González emphasized that Edomex has attracted over $7.7 billion in foreign investment during the current administration, placing it among the top five recipients in Mexico.

SOURCE: EL FINANCIERO

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INVESTMENT NEWS

NORTH COPELAND Copeland, a heating and cooling company, celebrated the inauguration of its new compressor plant in the Amistad Industrial Park in the municipality of Arteaga, Coahuila, with an investment of 22 million dollars. This project represents the creation of between 900 and 1,000 jobs

UNKNOWN Construction work has begun on a new auto parts plant in Zacatecas, with an investment of 20 million dollars.

The company will be located in the Aeropuerto I Industrial Park, in Calera, Zacatecas. It is expected to create 650 new jobs.

SOURCE: MEXICO INDUSTRY

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LEGISLATIVE CHANGES AND INITIATIVES FINANCIAL • BILL TO AMEND AND ADD VARIOUS PROVISIONS OF THE LAW FOR TRANSPARENCY AND REGULATION OF FINANCIAL SERVICES, REGARDING THE REGULATION OF COLLECTION AGENCIES — Presented by: Representative Claudia Alejandra Hernández Saenz (Tamps - MORENA) (See profile)

— Objective: Mandates financial entities to continuously monitor the activities of their collection agencies and hold them accountable for actions that violate the provisions of the Law and applicable regulations. Entities must also oversee the status of submitted claims, enabling customers to track them. Non-compliance with this requirement will be subject to fines.

Additionally, specifies that general provisions concerning collection agencies must be adhered to by financial entities, which will be held responsible for ensuring compliance by their agencies.

— Status: 2025-01-08 - Published in the Parliamentary Gazette

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PRODENSA INSIGHTS MEXICO’S PATH TO BECOMING A TOP 10 GLOBAL ECONOMY: INSIGHTS FROM EMILIO CADENA In a recent interview, Emilio Cadena, Prodensa CEO and former president of the Binational Board of Directors of the USA-Mexico Foundation, shared valuable insights on Mexico’s potential to emerge as one of the world’s top 10 economies. The conversation revolved around the recently unveiled “Plan México,” a strategic framework to enhance the country’s industrial and economic competitiveness. Here, we summarize the key takeaways from the discussion.

THE AMBITIOUS VISION OF “PLAN MÉXICO” The “Plan México” sets a bold goal: to position Mexico as a leading economic power by leveraging its industrial capabilities and geographic advantages. At its core, the plan aims to build local capacities to produce components that are currently imported, fostering a stronger domestic supply chain without resorting to outdated protectionist policies.

Cadena emphasized the importance of developing an industrial ecosystem similar to those in Asia, which have rapidly built the necessary infrastructure to support high-value manufacturing. He underscored that this is not about “import substitution” in the traditional sense but about creating a more robust and competitive regional supply chain.

INCREASING MEXICAN PARTICIPATION IN GLOBAL SUPPLY CHAINS One of the key objectives of “Plan México” is to increase the integration of Mexican companies into global supply chains, particularly in the automotive, aerospace, and electronics sectors. Today, many parts used

in Mexico’s export products are imported, limiting local value creation. By developing the infrastructure, capabilities, and skills needed to manufacture these components domestically, the plan aims to boost local content while attracting foreign direct investment (FDI).

Cadena noted that this effort should focus on investment from the North American region rather than relying heavily on imports from Asia, especially China.

This strategy aligns with the broader “nearshoring” trend, where companies relocate operations closer to home markets to increase efficiency and reduce supply chain risks.

TRANSFORMATIVE GOALS FOR INVESTMENT AND EMPLOYMENT The “Plan México” outlines several ambitious targets, including: • Doubling Foreign Direct Investment: Mexico currently attracts $35-40 billion annually in FDI, but the goal is to reach $100 billion by the end of the decade. This aligns with the immense opportunity presented by the U.S. and Mexico’s combined annual imports of over $1 trillion from Asia.

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PRODENSA INSIGHTS • 1.5 Million Advanced Manufacturing Jobs: The plan seeks to grow Mexico’s manufacturing workforce by 50%, adding 1.5 million jobs to the current 3 million in the sector. Achieving this will require significant public and private investment and a collaborative approach.

THE ROLE OF IMMEX AND NEARSHORING Cadena highlighted the IMMEX program as one of Mexico’s most successful tools for promoting foreign industrial investment. While not perfect, IMMEX has been instrumental in fostering growth in industries like automotive, aerospace, and electronics. Updating this program to align with the evolving global landscape is crucial for driving regionalization and attracting further investment.

Additionally, an updated nearshoring decree is expected soon. This policy will build on existing incentives like accelerated depreciation for relocation investments, making Mexico an even more attractive destination for global manufacturers.

KEY CHALLENGES: SECURITY AND ACCESS TO CAPITAL Despite the optimism, Cadena acknowledged the challenges that must be addressed for “Plan México” to succeed. Security remains a critical concern that impacts investor confidence and economic growth. Furthermore, Mexico must strengthen its capital ecosystem by fostering venture capital, angel funds, and private equity to ensure businesses can access the funding they need to grow.

He stressed that creating an environment where companies of all sizes can secure low-cost, long-term capital is essential for Mexico to achieve its economic aspirations.

A COLLABORATIVE FUTURE The discussion also highlighted the need for coordinated efforts between the public and private sectors.

Cadena commended the initial collaboration under “Plan México,” noting that both sectors are aligning to execute the plan effectively. Setting short-term milestones, as outlined in the presentation, will be crucial for maintaining momentum.

CONCLUSION Mexico stands at a pivotal moment, with the potential to redefine its role in the global economy. “Plan México” presents a clear and ambitious roadmap to increase local industrial capabilities, attract investment, and create jobs. However, the success of this initiative depends on addressing challenges like security and capital access while fostering collaboration between stakeholders.

As Cadena aptly noted, this is an opportunity for Mexico to thrive in a “new era of North American trade.”

With the right execution and sustained effort, Mexico can position itself as a top global economy, benefiting not only the country but also the broader North American region.

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PRODENSA INSIGHTS

STREAMLINING CUSTOMS AND TRADE COMPLIANCE WITH SHELTER SERVICES Discover how shelter service providers in Mexico streamline customs and trade compliance, enabling foreign manufacturers to operate efficiently without establishing a legal entity. By managing administrative tasks and ensuring adherence to Mexican regulations, these providers allow companies to focus on production while mitigating risks associated with non-compliance. Learn more about the benefits of partnering with shelter services for your manufacturing operations.

In case you missed it: What you Don’t know about Chinese FDI in Mexico (and Why its not a Risk) Key Points about Chinese FDI in Mexico Despite alarmist narratives, the data shows that Chinese FDI in Mexico is minimal compared to its USMCA partners. This analysis highlights four key points: • Mexico accounts for only 0.4% of official Chinese FDI in North America, challenging widespread perceptions of geopolitical risk.

• The data shows that Chinese investment in Mexico is inconsistent and low-impact in absolute terms.

• The U.S. and Canada remain the primary recipients of Chinese FDI, which is not in line with the current narrative.

• The opportunity for Mexico is the same opportunity for the U.S. and Canada - to work together to reshore electrical supply chains and de-risk from China, together.

MANUFACTURING IN MEXICO: QUALITY SYSTEMS Explore how Mexico’s manufacturing sector has become a global leader by implementing internationally recognized quality systems. Learn about the standards that ensure product consistency, operational efficiency, and regulatory compliance across various industries. Discover why investors are increasingly turning to Mexico for reliable and competitive production solutions.

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