In response to a possible delay in its investment decisions in Mexico, BYD, the Chinese electric vehicle giant, reaffirmed that it has not postponed any decision related to the construction of its new factory in the country, confirming that its plans are moving forward.

“BYD has not postponed any decision on a factory in Mexico. We continue to work to build a factory with the highest technological standards for the Mexican market, not for the U.S. market, nor for the export market,” the company said in an official statement.

Stella Li, CEO of BYD Americas, underlined the strategic importance of Mexico for the company: “For BYD, the Mexican market is very relevant, and we are very proud of the sales results that have positioned the company very quickly among the leading companies in the industry”.

With this confirmation, BYD seeks to dispel any uncertainty and reaffirm its commitment to the development of the automotive industry in Mexico, focusing on meeting local demand with cutting-edge technologies.

The construction of the new factory in Mexico will be a key step in the consolidation of BYD’s presence in Latin America, a region that the company considers fundamental to its global growth strategy.

BYD in Mexico

Last February, BYD announced its plans to install an assembly plant in the country and highlighted that they were analyzing the best infrastructure, location, logistics and labor conditions to determine its location.

As a result of this evaluation carried out in different regions of the country, the Chinese company recently shared that they had a selection of three states that offer the most favorable conditions for the installation of the plant. Various sources have pointed out Michoacán, Jalisco, Nuevo León, San Luis Potosí and, joining this list, the state of Puebla as finalists.

Source: Mexico Industry 

Querétaro reaffirms its position as one of the leading auto parts producers in Mexico. According to the latest data from the National Auto Parts Industry (INA), the state is among the main producers in the Bajío region, ranking second only to Guanajuato.

The North, Bajío and Central regions of the country account for approximately 95% of domestic auto parts production. Within this panorama, Querétaro stands out for its growth in the sector.

From January to May 2024, auto parts production in Queretaro increased by 9.93%, from US$3,9 billion to US$4.2 billion compared to the same period of the previous year.

In the dynamic Bajío region, Querétaro consolidated its position as the second largest auto parts producer, with total production of US$4.2 billion. Guanajuato leads the region with $US7.3 billion.

Following Querétaro, San Luis Potosí registers US$3.7 billion, Aguascalientes US$2.2 billion and Jalisco US$1.5 billion. Likewise, the Bajío region as a whole contributes 36.1% of Mexico’s total auto parts production.

In comparison, the North of the country, which generates 43.3% of auto parts, has Coahuila as its largest producer, with US$7.9 billion.

While in the Central zone, which represents 15.5% of production, the State of Mexico leads with US$3.3 billion.

Source: Mexico Now

The automotive industry in Mexico is at a crucial moment for its growth and consolidation with nearshoring, accumulating during the first quarter of 2024 more than 3.286 billion dollars in Foreign Direct Investment (FDI) in car and truck manufacturing alone.

The investment amounts of this period surpassed the flow of FDI that came to Mexico every year from 1999 to 2016, and also represented 64.5% of all that was received in 2023, when 5 billion 91 million dollars were reported.

Mexico offers a number of competitive advantages that position it as an attractive destination for investment in the automotive industry. These advantages include a solid logistics infrastructure with international bridges, seaports, highways and airports.

In addition to modern industrial park facilities and availability of manufacturing sites. The skilled and competitive labor force in terms of wages, together with a privileged geographic location close to the United States, the world’s largest consumer of automobiles, make the country a strategic location for the automotive industry.

Mexican production; The great global attraction

Since the Ministry of Economy began recording FDI flows (1999), the United States has maintained its position as the country that invests the most in Mexico in automotive manufacturing processes, specifically in the manufacture of cars and trucks, with an accumulated investment of over 17.352 billion dollars.

However, other countries such as Japan and Germany are gaining ground in this area, with accumulated investments of 12,960 million dollars and 11,911 million dollars, respectively, a diversification that reflects the confidence and potential of the automotive industry in the international market.

Top 5 FDI in the automotive industry

In the last 25 years, FDI that has come to Mexico for automotive manufacturing has accumulated more than 48,412 million dollars, and since the pandemic economic reactivation, the growth was more evident.

An analysis by Mexico Industry, based on data from the Ministry of Economy, highlights that in 2023, the manufacture of cars and trucks, bodies, trailers and parts for motor vehicles had a significant FDI impact in five states: Mexico City, Aguascalientes, State of Mexico, Chihuahua and Guanajuato, which together totaled 4 billion 979 million dollars of foreign investment.

Mexico City led FDI absorption with 1.248 billion dollars, followed by Aguascalientes with 1.132 billion dollars, the State of Mexico with 1.118 billion dollars, Chihuahua with 779 million dollars and Guanajuato with more than 702 million dollars. These states have proven to be key industrial development poles, attracting significant investments and contributing to the growth and consolidation of the automotive industry in Mexico.

The continuous growth of FDI in the Mexican automotive industry is an indicator of the strength of the sector and of the opportunities offered to future projects, in addition to the competitive advantages offered at the national level, showing that related manufacturing gives the necessary push and strengths for competitiveness in the face of nearshoring.

Source: Mexico Industry

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