Mexico is part of one of the most important economic blocs in the world, North America represents approximately 28% of the world’s GDP and Mexico’s trade with the United States and Canada reaches 640 billion dollars within the framework of the T-MEC.

In this context, 80% of exports are destined to the United States and 4% to Canada; Mexico as a neighboring country of the United States has a great advantage, however, this situation can become a dependency that means risks in a context of political volatility, in which a tariff war can bring catastrophic effects for the economy.

According to Senator Cecilia Pinedo, president of the Senate’s ASIA-PACIFIC-AFRICA foreign relations committee, China is Mexico’s second largest trading partner in the world and Mexico is China’s second largest trading partner in Latin America, with economic and commercial exchanges between both nations amounting to 130 billion dollars last year.

“Undoubtedly 52 years after the establishment of diplomatic relations between the two nations, we have managed to build a fruitful relationship in terms of economic and trade cooperation. However, it is evident that there is a great potential that we have not taken advantage of, as there are many opportunities for growth for both Mexico and China”.

In addition, Senator Pinedo stressed that it is necessary to take active actions in the promotion of mechanisms aimed at providing entrepreneurs and investors with better elements for decision making.

Senator Cecilia Pinedo, Chair of the ASIA-PACIFIC-AFRICA Foreign Relations Committee.

“Mexico offers great opportunities to companies from the People’s Republic of China, as a platform to export to Latin America, Europe and North America, and on the other hand, China is presented as one of the most attractive markets, with a population of more than 1,000 million inhabitants and an increasingly higher purchasing power, China and the Asia-Pacific region become one of the engines of the world economy.”

In this context, the recently inaugurated Greater Bay Area and Latin America Trade and Investment Advisory Center will become a central player in building a shared future between the China-Latin America community.

“In Mexico we want to be China’s main partner in Latin America, we have the growth potential, human and natural resources to provide companies seeking new investment destinations, alternatives and development projects in which they will capitalize on returns and generate high quality jobs,” he said.

He also emphasized that it is very important for Mexico to strengthen bilateral trade and investment from China, as this is the only way to achieve a better balance in the trade balance, but even more importantly, because in this way Mexico will diversify its relations with other economies and reduce its dependence on North America.

“Recently, a group of legislators went on a working tour of China, and we were able to see what can be achieved with the use of technology and a plan for growth and development based on equal opportunities. Mexican businessmen, representatives of the legislative branch and the government are aware of the need to promote this political-business economic rapprochement, as we have to work together to consolidate China’s investment in Mexico and encourage more Mexican businessmen to explore opportunities in China,” concluded Cecilia Pinedo.

Source: Mexico Industry

Elon Musk said Tesla Inc. won’t invest further in its planned Mexico factory until after the US election, citing too much political risk from Republican nominee Donald Trump’s pledges to impose more tariffs on Mexico-made goods.

“I think we need to see just where things stand after the election,” Musk said during Tesla’s earnings call on Tuesday. The EV maker’s chief executive officer formally endorsed the former president earlier this month.
It’s one of the first times Musk has clearly delineated business decisions based on the outcome of the US presidential race. “Trump has said that he’ll put heavy tariffs on vehicles produced in Mexico,” he told Tesla investors and analysts. “So it doesn’t make sense to invest a lot in Mexico if that is going to be the case. We kind of need to see where things play out politically.”

Musk’s decision highlights the political risk facing Mexico, which hopes to benefit from US President Joe Biden’s nearshoring policies. The Giga Mexico plant was by far the largest investment announced in the country in years. It also raises questions about the future of the EV industry’s growth, which has been propped up in the US by the Inflation Reduction Act.
Tesla had long been delaying plans to build a factory in the northern state of Nuevo Leon, even as local officials said plans for the facility were still afoot. A request for comment from the office of Nuevo Leon Governor Samuel Garcia wasn’t immediately returned.
Musk endorsed Trump shortly after his assassination attempt and pledged to make hefty donations into a super political action committee to help with his ground game. Whether he has contributed won’t be known until America PAC files with the Federal Election Commission on Oct. 15.

When asked about how a Trump presidency could impact Tesla, Musk demurred on how Trump’s plan to gut the IRA would impact the carmaker. Tesla’s business has received a big boost through manufacturing and investment tax credits through the IRA.
“It would be devastating for our competitors, and it would hurt Tesla slightly,” said Musk about the IRA being cut or reversed. “The value of Tesla overwhelmingly is autonomy.”

Source: Bloomberg

The governor, Mauricio Kuri González, and executives from DIEHL Aviation, announced the installation of the company’s plant in Querétaro. The project, focused on the manufacture of lavatories, supply systems and overhead compartments for airplanes, represents an investment of more than 900 million pesos and the generation of 500 jobs in the first stage.

The state governor met with the CEO of DIEHL Aviation, Jorg Schuler, and company personnel at the Farnborough Aerospace Fair, where they presented details of the project, the aerospace capabilities of the state, as well as the educational programs and specialized training centers in the sector.

During the meeting, Kuri Gonzalez said he was pleased to promote Queretaro as a strategic option for investment. In addition, he acknowledged the efforts of the team of the Ministry of Sustainable Development (SEDESU) to consolidate the new project of the German company.

“Congratulations to the SEDESU team, here with Marco Del Prete and Alejandro Rolland, who were a very important part of closing 500 new well-paid jobs for Querétaro, and together we are going to take Querétaro to the next level,” he said.

Speaking at the event, Jorg Schuler informed that the plant to be established in the state will not only stand out in the aeronautical industry for its production, but will also offer specialized engineering services in the industry.

“We plan to grow in Querétaro and build an ecosystem around us. In the first stage, we believe there will be around 500 people working for us in Querétaro. It is a great pleasure to be there and take advantage of this great country, this great city of Querétaro,” he emphasized.

DIEHL Aerospace GmbH is a specialist in interiors and avionics. Headquartered in Überlingen, Germany, it is organized as a joint venture between the German group DIEHL and the French group Thales. The firm was founded in 2006 through the merger of DIEHL Avionik Systeme GmbH and DIEHL Luftfahrt Electronik. By 2013, products manufactured by DIEHL Aerospace were already integrated into all Airbus and most Boeing aircraft.

The announcement was attended by the Vice President of Strategy and Operations Standards, Alexander Beer, as well as the Queretaro delegation with the presence of the Secretary of Sustainable Development, Marco Antonio Del Prete Tercero, and the Director of Industrial Development, Alejandro Rolland Ruiz.

Source: Cluster Industrial 

By 2024, Queretaro’s aerospace industry will seek to exceed 12,000 jobs. If this figure is reached, it would mean an increase of 18% compared to the jobs registered prior to the COVID-19 pandemic.

This was stated by José Antonio Velázquez, general director of the state’s Aerospace Cluster, who explained that during the pandemic, the industry reported less than 8,500 employees.

“After the pandemic, we are recovering with 10,000 people employed. We expect the figures for 2024 to exceed 12,000 people employed in the aerospace industry,” he said.

According to Velázquez, the first indication of the economic recovery of the aerospace industry was the re-hiring of personnel. This was followed by an increase in requests to companies to expand their supply base.

This increase, he said, has also been reflected in an increase in the number of members. During the pandemic, the Aerocluster registered less than 60 members and by the end of the first semester of 2024, it is estimated that there will be between 63 and 65 companies.

The new Aerocluster members will be focused on air operations services, service and supply of components for aircraft maintenance. As well as drone operations and ceramic component manufacturing.

“It is a 20% growth in the number of members and people employed, which represent the companies that are integrated into the aerocluster,” he said.

In 2021, the Aerocluster reported that they recorded sales of around 1.53 million dollars (mdd) from aerospace companies.

Source: Mexico Industry

Google will install its first Data Center data region in Mexico, which will be located in Querétaro. The announcement was made on Monday by the governor of Queretaro, Mauricio Kuri and the Secretary of Sustainable Development, Marco del Prete. Although the company has decided to keep the amount of the investment confidential, the news reinforces the state’s position as a hub for digital infrastructure.

“It confirms the state’s vocation as a data center valley,” stated Del Prete. Querétaro is consolidating its position as a strategic hub for the installation of data clouds, thanks to its privileged location and the security it offers investors.

This new Google data center will be the first in Mexico and the third in Latin America, after Chile and Brazil. The facility will serve the digital infrastructure needs of both Mexico and the entire Latin American region.

Google’s arrival in Querétaro comes on top of other important investment announcements in the technology sector in the state. In March of this year, Amazon Web Services (AWS) announced an investment of 5 billion dollars to establish its first AWS Central in Mexico and the second in Latin America. Likewise, in May, Microsoft started operations of its first data center region in the country. This facility is Microsoft’s first in Latin America and is part of its more than 60 cloud regions worldwide.

These developments underscore Querétaro’s growing importance as a hub for technology infrastructure in the region, attracting investment from leading global technology companies and consolidating its role in the digital economy.

Source: Mexico Industry 

Inegi, through the Administrative Registry of the Light Vehicle Automotive Industry, reported that Volkswagen, Honda and Mazda are the brands with the highest increase in production. Meanwhile, General Motors and Honda boosted exports.

Mexico’s automotive industry “turbocharged” in May and achieved record production and export figures for the same month in its history, driven by demand in North America, reported Inegi.

Automotive companies established in Mexico produced 365,574 units, representing a 4.9% growth compared to the figures reported for the same month in 2023.

Meanwhile, exports of light vehicles reported growth of 13%, with the volume of 310,655 units, which exceeds the figure for 2019, when the shipment of 319,017 units was recorded.

The National Institute of Statistics and Geography (Inegi) through the Administrative Registry of the Light Vehicle Automotive Industry, reported that Volkswagen, Honda and Mazda are the brands that presented the greatest increase in production. Meanwhile, General Motors and Honda boosted exports.

“Production and exports for the month of May 2024 had solid performance. It is the strongest May since 2005 for both production and exports, the year in which the Administrative Registry of the Automotive Industry was initiated,” highlighted the Mexican Automotive Industry Association (AMIA).

The information, which comes from 23 companies affiliated with the Mexican Automotive Industry Association, Autos Orientales Picacho, Giant Motors Latin America and Great Wall Motor Mexico (only in the case of domestic sales), highlighted that accumulated production grew by 5.5%. In terms of exports, there was a 12.3% growth from January to May 2024, compared to the same period in 2023.

During January-May 2024, 1,651,930 units were produced in Mexico.

Of these, light trucks, including SUVs and pick-up trucks, accounted for 75.2% of total production, while the rest corresponded to the manufacture of automobiles.

The United States accounted for 80.4% of total exports, with 1,147,170 vehicles.

The AMIA expects Mexico to produce up to 4 million vehicles by the end of 2024, of which more than 80% will be exported. Odracir Barquera, director of the AMIA, highlighted the contribution of GM and Ford’s electric vehicle production, which so far has achieved 36,100 units assembled.Source: El Economista

During the first quarter of 2024, foreign direct investment (FDI) in Mexico amounted to US$20.3 billion, 9% higher than the US$18.6 billion reported in the same period of 2023, reaching a new historical maximum for a similar period since records began, informed the Ministry of Economy (SE).

In a press release, the agency highlighted that in the first three months of the year a reconfiguration of FDI behavior has been observed, as a result of foreign investors’ confidence in the good business environment and the country’s economic stability.

“This allows foreign capital to be maintained through the reinvestment of its profits and companies to have the capacity to make and receive loans, as well as to pay off their debts abroad,” said the SE.

The United States was positioned as the main investment partner in Mexico, accounting for 52% of total flows ( US$10.6 billion); nevertheless, the agency assured that there is greater diversification in the origin of investments and their sectors of participation.

Below the United States was Germany, with US$1.74 billion, equivalent to 9% of the total; followed by Canada, with US$1.70 billion (8 percent), and Japan, with US$1.43 billion, representing 7 percent of total foreign direct investment.

It is worth mentioning that 97 percent of the foreign investment received by Mexico in the first quarter of 2024 came from reinvestment of profits, that is, profits of the companies’ shareholders that remain in the country instead of being sent abroad; meanwhile, only 0.6 percent were new investments and 0.1 percent were intercompany accounts.

On the other hand, it was detailed that 77 percent of FDI was concentrated in five states, among which Mexico City stands out as the main recipient of capital, with an amount of US$12.4 billion, followed by Nuevo León, with US$1.35 billion; Baja California, US$1.83 billion; Veracruz, US$685 million, and Chihuahua, with US$683 million.

Source: Mexico Now

During the last year, Mexico set a record in its economic history by attracting more than 36,058 million dollars of Foreign Direct Investment (FDI) in 2023. This amount highlights the confidence of international investors in the country, and in turn demonstrates the importance of promoting the manufacturing industry as one of the main competitive advantages for the arrival of new projects, creating jobs and promoting economic development, since, according to the Ministry of Economy, this activity absorbed 50% of FDI in this period.

The foreign capital that focused on industry covered several sectors, ranging from automotive production, to food, beverages, medical, chemical, metal-mechanic, electrical, electronic, plastic, rubber and others.

At a national level, it was highlighted that more than $4,817 million dollars of FDI in 2023 were destined to the creation of new companies or the incorporation of flows within companies, while $4,610 million dollars to inter-company accounts, and $24,631 million dollars to shareholders’ profits, which evidenced the existence of guarantees for the productive sector to develop and grow with guarantees in Mexico.

Consecutive growth

Internationally, the Covid-19 pandemic marked a turning point in financial terms, and in Mexico this phenomenon was a catalyst in attracting FDI, together with nearshoring.

The FDI comparison between 2020 and 2023 shows a 24% growth, going from a flow of $29,079 million dollars to more than $36,058 million dollars. During 2021, when economic activities began to reactivate after the crisis generated by the pandemic, also reflected an increase in FDI by closing with $31,621 million dollars; then, in 2022 FDI rose to $35,292 million dollars, but it should be noted that $6,875 million dollars corresponded to the merger of a media company and the restructuring of Mexicana de Aviacion.

In this context, official data show that, excluding this last movement, FDI growth between 2022 and 2023 was 27%.

Origin of investment

The investment that Mexico received in the last year came from various countries worldwide, but historically the United States has remained the leader. In 2023, the U.S. contribution was 13,641 million dollars, 38% of the total.

In second place was Spain with just over 10%, for a total of $3,774 million dollars; Canada, in third place, with just under 10%, or $3,472 million dollars; Japan, in fourth place; 8% $2,909 million dollars; Germany, in fifth place; Germany, in third place; Japan, in fourth place; and Germany, in third place, with 8% $2,399 million dollars; 7% $2,399 million dollars, Argentina, sixth place; 6% $2,248 million dollars, United Kingdom, seventh place; 3% $936 million dollars, Netherlands, eighth place; $892 million dollars, Belgium, ninth place; $759 million dollars and South Korea, tenth place; $497 million dollars.

The diversification of industries includes companies such as Bosch, BMW, Mercedes Benz, Toyota, Nisan, Hitachi, LG, Samsung, Ternium, Ford, DIAGEO, Iberdrola, Hanon Systems, Vest, TC Energy, SMTC Manufaring, GSK and Heineken; in addition to banking institutions such as Scotiabank, Banamex, BBVA, among others.

There are also companies that arrived or expanded operations in the country during this period, such as Sempra Energy, Molymex, Cargill, Continental, Flextronics, Pfizer, Indorama Ventures, Tetra Pak, Borg Warner, Rekit and Aptiv.

Specialized manufacturing

The Ministry of Economy emphasized that 50% of the FDI that came to the country in 2023 was destined to the manufacturing industry, which represents an amount of $18,081 million dollars.

Mexico, which is characterized for being a specialized manufacturing center, reported the flow of FDI in five categories related to industrial activity; in manufacturing of transportation equipment which in turn accumulated 41% of the budget, production of beverages and tobacco 14%, metals 13%, computer equipment 9% and the chemical industry 8%.

In addition, in the statistics of the Ministry of Economy, the production of equipment for energy generation accounted for 5%. On the other hand, 76% of the FDI registered in 2023 is concentrated in 10 Mexican states: Mexico City, Sonora, Nuevo Leon, Jalisco, Chihuahua, State of Mexico, Baja California, Aguascalientes, San Luis Potosi and Queretaro.

In particular, the leading state Mexico City accumulated 31% ($11,197 million dollars), Sonora, 8% ($2,706 million dollars); Nuevo Leon, 7% ($2,537 million dollars); Jalisco, 6% ($2,028 million dollars), Chihuahua, 5% ($1,980 million dollars), State of Mexico, 5% ($1,927 million dollars); Baja California, 4% ($1,472 million dollars); Aguascalientes, 4% ($1,379 million dollars); San Luis Potosí, 3% ($1,116 million dollars), and Querétaro, 3% ($1,107 million dollars). The United States is the country with the largest investment in all regions of Mexico.

Sectoral capture

When reviewing state statistics and their impact by sector, the picture changes. For example, in metal mechanics; where the list is headed by Nuevo Leon, with more than $1,442 million dollars; followed by Aguascalientes, $877 million dollars; Jalisco, $556 million dollars; Chihuahua, $288 million dollars, and Veracruz, $268 million dollars.

Mexico City is the state that led the absorption of the chemical industry with more than $582 million dollars; then Puebla, $313 million dollars; State of Mexico, $160 million dollars; Queretaro, $115 million dollars; and Morelos, $105 million dollars.

On the other hand, in the electric-electronic sector, Jalisco was positioned as leader in the reception of capital, with an absorption of more than $2,555 million dollars, Chihuahua was in second place with $570 million dollars, Mexico City with $481 million dollars, Nuevo Leon with $417 million dollars and Tamaulipas with $155 million dollars.

Meanwhile, in the automotive industry, Mexico City remained in first place with more than $1.248 billion dollars, followed by Aguascalientes, $1.132 billion dollars; State of Mexico, $1.118 billion dollars; Chihuahua, $779 billion dollars; and Guanajuato, $702 billion dollars.

The manufacture of machinery and equipment was another central aspect in attracting FDI; Mexico City accounted for more than $94 million dollars; Queretaro, $51 million dollars; Chihuahua and Tamaulipas, $42 million dollars; Baja California, $35 million dollars.

With this, Mexico continues to position itself as one of the most attractive destinations for the manufacturing industry, not only because of its geographic position and logistical advantages, but also because of the support and financial performance in recent years that ensure that even in periods of uncertainty such as the pandemic, economic movements are generated for the benefit of the business sector.

By surpassing all federal statistics, in 2024 Mexico seeks to strengthen and surpass the economic records achieved in 2023, and thus further highlight its position as a leader in global investment.

Source: Mexico Industry