Mexico is again the top trading partner of the United States, with two-way trade totaling $48.47 billion in February, according to data from the U.S. Census Bureau.

China had been the top U.S. trade partner for 10 consecutive months beginning last May.

In February, the nation’s top trade partners were:

• Mexico, $48.47 billion.
• Canada, $47.39 billion.
• China, $43.44 billion.
• Japan, $14.5 billion.
• Germany, $14.1 billion.

The U.S. exported $21 billion in goods to Mexico during February, and imported $27.47 billion from Mexico during the same period.

According to census bureau data analyzed by WorldCity Inc., the top three exports in February from the U.S. to Mexico were liquefied natural gas ($3.4 billion), gasoline ($1.58 billion) and motor vehicle parts ($1.08 billion).

The top three imports from Mexico were passenger cars ($2.28 billion), motor vehicle parts ($2.07 billion) and commercial vehicles ($2.01 billion).

The top trade ports along the U.S.-Mexico border during February were:

• Port Laredo, Texas, $17.6 billion.
• Ysleta border crossing, Texas, $4.62 billion.
• Pharr-Reynosa International Bridge, Texas, $4.28 billion.
• Otay Mesa port of entry, California, $3.67 billion.
• Eagle Pass port of entry, Texas, $2.41 billion.

The Ysleta port of entry is near El Paso. Officials recently began diverting some commercial traffic from bridges in El Paso to Ysleta to reduce congestion in the area and to serve as a new route for commercial freight vehicles crossing to and from Mexico.

Port Laredo’s total trade declined 5.57% compared to the same month one year ago. The port ranked No. 4 among all U.S. ports in February. It had ranked No. 1 for the same month last year.

Troy Ryley, president of Redwood Mexico for Redwood Logistics, told FreightWaves that “cross-border disruptions prevalent in 2020 have certainly carried over into 2021 and could escalate in the short-term.”

“Mexico shipping continues to face equipment shortage and longer border crossing times heading into the second quarter,” Ryley said. “As the first quarter of 2021 comes to an end, we are bracing ourselves for one of the most challenging spring seasons in the transportation industry yet.”

Laredo’s headhaul index (HAUL.LRD) has risen 72% since April 4, indicating a tightening in trucking capacity, according to FreightWaves SONAR platform.

Source: Freight Waves

( https://www.freightwaves.com/news/mexico-regains-status-as-no-1-us-trade-partner )

Argentina-based e-commerce giant MercadoLibre Inc is planning to double its workforce this year and invest $1.1 billion to expand its warehouse space and services in Mexico, spurred on by a pandemic-driven boom in online shopping.

The investment figure is nearly triple the $420 million MercadoLibre spent last year in Mexico, a rapidly growing market where it is battling to stay ahead of global giant Amazon.com Inc and other rivals.

The investment will help MercadoLibre double its warehouse space and boost fintech services such as consumer credit, the company said in a statement, adding that it will create more than 4,700 jobs in the country.

The company, which has a market capitalization of around $75 billion, also said on Tuesday it would add 16,000 new jobs around the region this year, doubling the size of its team. The company’s shares soared last year but have dipped in 2021.

David Geisen, head of MercadoLibre’s Mexico unit, said the company decided to ramp up spending this year based on strong demand not only from shoppers, but also vendors that sell on its platform.

“If we don’t speed up (investment), we would have various bottlenecks,” he told a news conference.

Geisen added that he expected the company to post double-digit growth in Mexico this year, closer to pre-pandemic figures, after revenue grew more than 100% in the third and fourth quarters of 2020 year-on-year.

Mexico also exceeded MercadoLibre’s home market of Argentina in terms of items sold in the fourth quarter of 2020, and the company has steadily ramped up its Mexico delivery network, recently opening a fourth distribution center, a 60,000-square-meter site in the northern state of Nuevo Leon.

By the end of last year, MercadoLibre operated 210,000 square meters (2.26 million square feet) of warehouse space, mostly on the outskirts of Mexico’s populous capital.

MercadoLibre has previously said it would spend almost $1.8 billion in Brazil this year. It has not disclosed overall investment plans for the region.

Source: Reuters

( https://www.reuters.com/article/us-mercadolibre-mexico-idUSKBN2BT2A9 )

Mexican used car startup Kavak raised a record amount of financing to fund a major expansion into Brazil and is now valued at $4 billion.

The Mexico City-based startup plans to begin operations in Brazil after the Series D funding round which raised $485 million and was led by D1 Capital Partners, Ribbit Capital, BOND and Founders Fund Management LLC.

The company, which currently operates in Mexico and Argentina, may enter additional countries in the coming 24 months, said co-founder and chief executive officer Carlos Garcia.

“The market is enormous, it’s broken and it’s really informal,” Garcia said in an interview, adding that the used-car market is worth $60 billion annually in Mexico alone, with 80% of those transactions made between individuals. “The pandemic accelerated consumers’ trust in digital platforms, and car demand will continue growing globally due to social distancing needs.”

Kavak buys used cars through its app, refurbishes them and then sells them to consumers, with the option of giving them medium term financing. Company transactions surged during the pandemic as stay-at-home measures encouraged buyers to move safely in their own cars, and look for cheaper second-hand options. The company grew to 2,500 employees in the past six months, up from 500 before.

The company is planning to use the financing to grow its car inventory to 30,000 cars in the next 18 months — up from 12,000 vehicles currently — and to boost its financing credit lines, invest in technology and in infrastructure including warehouses and refurbishing centers.

Kavak’s upfront investment in Brazil means that it will have more infrastructure there than in Mexico, its home market which is currently its largest.

Kavak was founded in 2016 after Garcia faced multiple setbacks when trying to sell his car to move from Colombia to Mexico, from mechanic issues to receiving incorrect information on the car. That drove him to add transparency to a market prone to fraud, and with potential to grow across emerging markets beyond Latin America, Garcia said.

In prior rounds, Kavak has been also backed by SoftBank Group Corp., Greenoaks Capital, DST Global and Kaszek Ventures, among others. Garcia declined to give an estimate for when the company might look to do an initial public offering.

Source: Bloomberg

(https://www.bloomberg.com/news/articles/2021-04-07/mexican-startup-kavak-valued-at-4-billion-after-latest-round)

Since 1970, Weston, Wisconsin-based Wise Harness Solutions has assembled wire harnesses, battery cables and control panel assemblies to support its customers’ wire harness needs. The company prioritizes offering high-quality products, delivered on-time, at an excellent value and sees its expansion into Mexico as one more way to deliver upon this promise.

The decision to expand into Mexico came as Wise Harness Solutions executives sought a solution to the ongoing labor shortage plaguing manufacturers across the U.S. The company had found itself struggling to grow its Wisconsin workforce to support the demand from its customers. With more of its competitors moving into Mexico, the company recognized that the lack of a Mexican presence, combined with this workforce shortage, would make it more difficult to provide the highest quality products, on-time delivery, at the competitive price its customers expected.

Michaud adds, “We selected Empalme as the location for our new facility due to its proximity to the U.S. and the availability of an experienced workforce.” Empalme is a mere four-hour drive to the U.S. border. However, it’s location along the sea of Cortez, the second largest port on the Pacific Coast, provides manufacturers with additional options for cost-effectively reaching global customers in a timely manner.

The 25,000-square-foot facility will begin producing complex OEM vehicle wire harnesses, battery cables and control panels by early April 2021. Wise Harness executives expect that the additional capacity this facility affords will help the company to bid on more projects, allowing for additional expansion in product offerings over the next few years.

Source: CISION PR Newswire

( https://www.prnewswire.com/news-releases/wise-harness-solutions-expands-into-emplame-sonora-mexico-301254507.html)

In an arid valley in central Mexico, one of the world’s largest automotive suppliers is preparing to open a new plant to produce components for North America, underpinning the export business that has kept the country’s struggling economy ticking over.

The new Continental AG plant in Aguascalientes state should benefit from the new United States-Mexico-Canada (USMCA) trade deal and U.S. President Joe Biden’s $1.9 trillion stimulus plan to revive growth after the coronavirus pandemic.

The confidence expressed by local executives of the German parts maker echoes growing optimism among analysts that a global recovery will lift Mexico’s economy more than previously expected, despite ongoing weakness in domestic demand.

“We’ve got high (auto) output coming, high volumes for everyone, and that’s what we’re getting ready for,” said Ina Seterbakken, the manager of plant still under construction.

Continental expects business to revive after delays caused by pandemic-related disruptions, Seterbakken said, noting the facility was a strategic bet given Mexico’s proximity to the United States, the world’s biggest economy.

The new plant, which will employ about 1,000 people, joins a thick belt of automotive factories clustered in central Mexico, whirring with machinery focused chiefly on satisfying export demand that the market access of USMCA provides.

“If (USMCA) hadn’t been agreed, it would have really changed this country’s economy,” said Gustavo Puente, economy minister in the central state of San Luis Potosi, which recently unveiled a separate 60 million euro Continental investment.

Mexico’s economy last year suffered its worst slump since the 1930s, with gross domestic product (GDP) shrinking by 8.5%. Robust foreign demand ensured the outcome was not worse.

President Andres Manuel Lopez Obrador has resisted calls to splash out to prop up the economy, arguing that bailouts and deficit spending tend to line the pockets of the rich.

But his country has benefited from stimulus spending in wealthier countries, especially the United States, which soaks up around 80% of all Mexico’s goods exports.

The automotive industry forms the core of manufacturing output, which makes up almost a fifth of Mexico’s economy.

Buoyed by the prospect of a revival north of the border, Mexico’s government is revising up its 2021 growth forecast to 5.0-5.5%, and Finance Minister Arturo Herrera said the U.S. stimulus plan was “very important” to the country.

Private sector analysts are doing the same, with JPMorgan recently raising its 2021 estimate for the second time this year to 5.6%.

“If it weren’t for such a strong program in the United States this year, Mexico might be growing 2.5% or 3%,” said Gabriel Lozano, the U.S. bank’s chief economist for Mexico.

COMMERCIAL EDGE

Mexico has committed funds worth about 1.3% of GDP to reviving its economy, according to International Monetary Fund (IMF) calculations. In Brazil, by contrast, it is 6.2%.

Yet despite that, Mexico’s economy is expected to grow by 4.3% this year versus 3.6% for Brazil, the IMF estimates.

Export exposure is one reason.

Worth some $360 billion before the pandemic, according to U.S. official data, Mexican annual exports to the United States are equivalent to about a third of GDP. Brazil’s U.S. exports were worth under $31 billion in 2019.

The difference between Latin America’s two biggest economies also shows up in financial markets: while the Mexican stock exchange has gained 4.9% so far in 2020, the Brazilian exchange has lost 8.2%, when measured in dollars.

Nevertheless, some analysts and bosses in Mexico have their doubts. They note that appetite for manufactured goods abroad contrasts with flagging domestic demand, with Mexican fixed capital investment plummeting more than 18% last year.

How well Mexico recovers will depend in part on the government’s ability to overcome tensions with business and encourage investment in manufacturing, which could profit from a drive to regionalize supply chains away from Asia under USMCA.

Drawn to lower-cost Mexico to get a competitive edge, companies are watching nervously to see if the government’s moves to strengthen state control of the electricity market will affect energy-intensive sectors like carmaking.

“(The electricity sector) is decisive for the Mexican economy to grow steadily, but for this, the state must guarantee the principles of free competition and legal certainty,” the American Chamber of Commerce (AmCham) in Mexico said last month.

Source: REUTERS

( https://www.reuters.com/article/us-mexico-economy-analysis-idUSKBN2BB2BO )

Honda Motor Co said late Tuesday supply chain issues will force a halt to production at a majority of U.S. and Canadian auto plants for a week.

The Japanese automaker added the issue will result in some production cuts next week at all U.S. and Canadian plants, citing “the impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather over the past several weeks.”

“In some way, all of our auto plants in the U.S. and Canada will be impacted,” Honda said.

Some U.S. and Canadian plants are expected to have smaller production cuts next week, but a spokesman for Honda added “the timing and length of production adjustments could change.”

The company declined to specify the volume of vehicles impacted but said “purchasing and production teams are working to limit the impact of this situation.”

The company added when production is suspended Honda workers “will continue to have the opportunity to work at the impacted plants.” Honda workers were notified of the production cuts Monday.

Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, said Honda typically produces about 30,000 vehicles a week in the United States and Canada.

The production issues are hitting Honda plants in Ontario, Ohio, Alabama, and Indiana. Honda said its Mexico operations have not announced any production cuts.

The chip shortage, which has hit most of the global automakers, stems from a confluence of factors as carmakers, which shut plants for two months during the COVID-19 pandemic last year, compete with the sprawling consumer electronics industry for chip supplies.

General Motors Co has cut production at many plants and warned it could shave up to $2 billion from this year’s earnings.

GM’s U.S. rival Ford Motor Co previously said the shortage could hurt 2021 profit by up to $2.5 billion and said it had curtailed production of its flagship F-150 pickup.

Source: REUTERS

(https://www.reuters.com/article/idUSKBN2B9042 )