TOLUCA – ZF announced an investment of 39.6 million euros to build a manufacturing plant in Toluca, focused on the production of components for electric passenger vehicles.

The new plant will have high-capacity assembly lines for manufacturing, just-in-sequence front and rear axles and suspension modules for electric passenger vehicles.

The investment will be distributed through 2024, generating close to 150 new jobs over the next two years, while increasing the current plant footprint in the state by approximately 8,000 square meters.

“As the automotive industry evolves to become more electrified, automated and connected, our manufacturing capabilities are evolving as well, and we are very excited to establish this new state-of-the-art manufacturing facility in Toluca,” said Dale Chon, ZF Group Vice President of Automotive Chassis Technology for the North America Region.

Last year, the company invested more than 46 million euros to increase production of control arms, stabilizer bar arms and steering ball joints at another complex, also located in the city of Toluca.

ZF currently has 18 sites in the country, manufacturing chassis, steering, brakes and other components. In addition, Tier 1 opened a new Research and Development and Shared Services Center in Monterrey in 2022 and is building a plant at the same site to begin production of advanced electronics and safety devices in 2023.

Source: Mexico Now 

The auto parts manufacturing sector is the main recipient of nearshoring investments, with 37%; followed by the furniture industry, with 18%; machinery and tools, 15%; electronics and household appliances, with 15%; high tech, with 8%; pharmaceuticals, with 5%; and plastics, with 1%, according to information from the National Auto Parts Industry (INA).

It also informed that 40% of the total relocation of plants in Mexico corresponds to Chinese origin, 20% to the United States, 11% to Japan, 9% to Germany and 8% to South Korea, among others.

“Regarding the investment announcements made in our country, which amount to 15 billion dollars in the Mexican automotive sector alone, the manufacturing of batteries for electric cars, chassis, transmissions, automotive interiors, aluminum rims, mold and tooling manufacturing, electrical components, plastic injection parts, engine parts and line expansion,” said Alberto Bustamante, general director of INA.

Source: Mexico Industry

At least 20 Dutch companies are evaluating moving their operations from China to Mexico, mainly to the Bajío region, to secure their investments in the long term.

“With what is happening in China, companies want to leave. Many companies with Dutch capital are there and are now evaluating whether to move to Mexico or to other countries,” said Steven Büter, manager of the Business Office of the Embassy of the Kingdom of the Netherlands.

He informed that some of the factors for which companies are considering relocating are the relocation of production chains, the war between Russia and Ukraine, and the Treaty between Mexico, the United States and Canada (T-MEC).

These companies belong to the manufacturing, retail, agricultural, service and corporate office sectors. Querétaro, for example, is about to receive an investment of 1 billion pesos from the agri-food sector, which will generate 500 jobs. This brings the total number of Dutch capital companies installed in the state to 75, and investment is expected to continue to increase.

“The interest of the Netherlands in Querétaro continues to grow and even more with the war between Russia and Ukraine, they are analyzing where to locate their investment so that it is safe in the long term and they see Mexico as a good option, a reliable partner that gives results to Dutch companies,” he said.

Source: Mexico Industry 

The aerospace industry in Mexico is in a clear recovery, there were many players that suffered after the COVID-19 pandemic, others disappeared and some others had to join forces to avoid disappearing, but at the end of the day, those that remained are now very strong, says Carlos Robles Alvarez, new president of the Mexican Federation of Aerospace Industry (FEMIA).

In an interview for A21, the executive explains that the company has not yet reached the export levels recorded before the pandemic, but in 2022 there was a growth of almost 18% net in exports compared to the previous year.

“We still haven’t recovered from the pandemic, we would have to exceed US$9 billion (in exports) to be back to pre-pandemic levels, but we are already back to US$8 billion and more,” said the president of AMBE Engineering.

He added that the “nearshoring” phenomenon is currently very important, since it is a trend that is gaining strength and should be taken full advantage of.

“The pandemic exposed many of the weaknesses that existed in the supply chain and much of this supply was in Asia, especially China, but with the trade problem it faces with the United States, other options are being sought; that is why nearshoring is one of the opportunities that this health crisis gave us,” stated Robles Alvarez.

In this way, there are large manufacturing companies in the United States and Canada that are demanding suppliers with a presence in North America or in the region, this is where Mexico has a great opportunity because of its capabilities, its proximity to the United States, the facilities it has and the knowledge it has of the sector, which makes it a major player in this area.

Robles Álvarez explains that in order to take advantage of nearshoring, there are two major challenges: the first is to strengthen the supply chain in Mexico; in other words, not only to promote the construction of more factories or create basic services to serve the sector, but also to integrate the supply chain.

Source: Mexico Now

The main suppliers of goods and services to the United States are China, Mexico and Canada. Although the Asian giant has lost ground in U.S. imports, it still accounts for 16.5% of the total.

The United States is readjusting its international trade dynamics; after five years of trade war with China, this Asian giant has already lost strength among U.S. suppliers, although it continues to position itself as the leading supplier.

During 2022, U.S. imports of Chinese origin amounted to 537 billion dollars, 16.5% of total U.S. purchases, according to figures from the U.S. Census Bureau.

It bought goods and services from Mexico for 455 billion dollars, making it the second largest supplier.

Canada was in third place, and U.S. imports from this country were equivalent to 438 billion dollars.

Source: El Economista 

The U.S. company Tesla will indeed install its electric vehicle plant in Nuevo Leon, as announced by Andres Manuel Lopez Obrador, President of Mexico, during his conference on February 28.

“This is good news, the entire Tesla company is coming, the entire automotive plant is coming to Mexico. Yesterday we spoke with Elon Musk, director of Tesla, there is already an understanding. Yes, they are going to invest in Mexico and they are going to establish the plant in Monterrey with a series of commitments to address the problem of water scarcity. They are going to help in this regard,” he revealed.

He said he is satisfied with Tesla’s installation in Monterrey because it means more investment and more jobs, which will have an impact on increasing workers’ salaries.

Tesla will make the official announcement of its arrival in Nuevo Leon.

The president informed that, probably tomorrow, Tesla will make the announcement of the construction of the gigafactory in detail and, in addition, they will report on some commitments acquired.

“I spoke with Elon Musk on two occasions by videoconference, on Friday night, from Chetumal, and yesterday morning. He was very receptive, understanding our concerns and accepting our proposals, which will be made known starting tomorrow,” he assured.

The President of Mexico thanked Elon Musk for understanding the importance of addressing the problem of water scarcity.

“There is a first commitment which is that it is the use of treatment water in the entire manufacturing process of electric cars, even up to the painting of cars,” he revealed.

He explained that an investment of this magnitude induces an increase in population, which means more water consumption.

“We have been helping the state government [of Nuevo León] to solve the problem of the water deficit for human consumption, which is the priority; they are investing in the Libertad dam and in the construction of the aqueduct. This will solve the problem in the short term. This was presented to Musk, therefore, we reached agreements to think in the medium and long term about the water supply”, he mentioned.

“There is going to be technological development, not only in the plant, but also in relation to water management,” he said.

Finally, he said that the announcement will be made by Tesla executives.

Source: Mexico Industry 

SAN LUIS POTOSI, Mexico,  German automaker BMW will invest 800 million euros ($866 million) in the central Mexican state of San Luis Potosi to produce high-voltage batteries and fully electric “Neue Klasse” models, the carmaker said Friday.

The expansion, set to add around 1,000 new jobs at its operations in the Mexican state, is BMW’s latest push into electric vehicles (EVs) as it looks to convert more than half of its sales into all-electric cars by 2030, it said.

More than half of the funds to be invested in Mexico – 500 million euros – are earmarked for the battery assembly center on the carmaker’s existing plant grounds, BMW said, and some 500 additional employees will work there.

Additionally, another 500 jobs will be created in other areas, it said.

The remaining 300 million euros will go to adapting and extending the body shop and building a new assembly line to install the battery packs, plant head Harald Gottsche told Reuters.

“We will start building, constructing the extensions and the new battery assembly in the beginning of 2024, and we will start (to ramp up) production at the beginning of 2027,” he said.

The announcement follows several other major expansions from the automaker in recent months, including a $1.7 billion investment in the United States and a 2-billion-euro push to build an EV factory in Hungary.

The plant in Hungary has been pitched as the first of BMW’s to be completely fossil-free. Gottsche added the Mexico plant was in the process of increasing its solar production on-site and swapping out natural gas for biomethane.

“We want to beat the Hungary plant, of course,” Gottsche said.

The push comes as manufacturers worldwide shift to comply with more stringent environmental regulations to mitigate their impact on climate change.

Mexico has also increasingly made the push for EVs as it looks to turn half of auto production electric by 2030.

While some industry leaders have cast doubt on that goal, Gottsche said BMW’s sales in Mexico were already 30% hybrid or fully electric.

“We will need much more renewable energy” to make the switch, Gottsche said.

Source: Reuters