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

BMW Group San Luis Potosí Plant started the construction of the Battery Module Production Center, in addition to the expansions of the body shop area and the assembly and logistics areas within its complex located in the Logistik II industrial park in Villa de Reyes.

For this project, the German firm invested 800 million euros, allocating 500 million specifically for the construction of this center, which will be located in an area of 81,876 m²; the building corresponds to a steel structure of one floor with mezzanine with a height of 12.2 m, being a CO2-free building.

“This is a sign of BMW’s confidence in San Luis Potosi and its people. In recent years BMW has met important milestones and is ready to take the next step. We are ready to be a production site, sustainable, digital and efficient. This plant was the most sustainable BMW plant in the world,” commented Harald Gottsche, president and CEO of BMW Group Planta San Luis Potosí.

For his part, Milan Nedeljković, BMW Group AG board member responsible for production mentioned that “The production of high-voltage batteries in San Luis Potosí will be part of our global production network for the new sixth e-drive generation. To this end, we are building five sites on three continents”.

He added that, “BMW Group is committed to the ‘local for local’ principle worldwide: locating battery factories close to vehicle manufacturing to strengthen the production process.”

In addition to the San Luis Potosi location, production sites for sixth-generation high-voltage batteries are also being built in Debrecen (Hungary), Shenyang (China), Woodruff near Spartanburg (USA) and Irlbach-Straßkirchen (Lower Bavaria).

Expansion in body shop and logistics

In addition to the integration of battery production, the body shop area will be expanded by almost 20,000 m² to more than 90,000 m², which will be used for the production of the vehicle floor. On the other hand, the assembly area will be used for the battery incorporation process, which, together with logistics, will be expanded by almost 10,000 m².

“With this new development we are preparing in San Luis Potosí for the launch of the next generation of BMW models. We will be pioneers in the industry as the first premium carmaker in Mexico to produce fully electric vehicles and high-voltage batteries, while continuing to reduce our environmental footprint,” said Harald Gottsche, president and CEO of BMW Group Planta San Luis Potosí.

Human capital development

The German company will also invest 10 million pesos in its training center for training rooms, robot integration and electromobility. The aim of this project is to implement training programs for the employees of this new area, with the objective of ensuring that its human talent is highly qualified. These trainings will start with awareness-raising topics on safety in the production of high voltage systems and robotics, manufacturing processes, among others.

General information

As part of the project follow-up, equipment installation will take place in June 2025, while construction is expected to be completed in January 2026.

Production is expected to start in 2027 with a volume of 30 units per hour.

Source: Mexico Industry 

To manufacture tires, with an investment of 380 million US dollars and the generation of 1,100 direct jobs.

With an investment of 380 million dollars (million dollars) and the generation of 1,100 direct jobs, the company of Japanese origin, Yokohama Rubber Company, began construction of its new plant this Monday. plant in Saltillo, which will manufacture automobile tires.

The company will be installed in the industrial zone of Derramadero, south of Saltillo, where the state governor, Manolo Jiménez, accompanied the company’s directors to lay the first stone.

The governor indicated that to achieve the arrival of Yokohama to Coahuila, a visit to the offices of the Japanese company was necessary, where after a talk with the president of the corporation, Masataka Yamaishi, an agreement was reached on the investment in the municipality of Saltillo.

“It is very important to continue working as a team, companies like Yokohama come to Coahuila because we are a safe state, a competitive state, a state where we have energy, water, land, qualified labor, and we have to take care of that, it is not the work of It is a coincidence that Saltillo, that Coahuila is one of the best places to live and invest,” stated the state president.

Manolo Jiménez thanked the Yokohama company for having decided to invest in Coahuila.

For his part, the president of Yokohama Rubber, Masataka Yamaishi, stated: “We firmly believe that our presence in Mexico will not only improve the economic fabric of the region but will also strengthen the ties of friendship and cooperation. between our two nations.”

The president of YTC, Jeff Barna, mentioned that with the establishment of this new factory, not only is there a closer relationship with the customer, but the quality of the products is improved, in addition to pointing out that this strategic position goes beyond guaranteeing a stable supply of tires since it is also focused on improving the economic conditions of the region where it is installed.

“The establishment of this company here in Saltillo is significant for us, especially in its role of serving the North American market, and this is an important market for us, driven by savvy customers who demand excellence, trust, and value.”

Source: Vanguardia Industrial 

Mexico has solidified its position as a leading supplier of auto parts to the United States, accounting for 42.5% of total imports in the first two months 2024, up from 38.2% six years ago, according to data from the United States Department of Commerce.

In addition to Mexico’s performance, with record breaking exports, Canada experienced a 16.8% growth in auto part exports to the United States in the first two months of 2024, while China witnessed a 19.2% decline in its shipments to the same market.

The implementation of the USMCA has brought about changes in the automotive sector’s landscape. The agreement’s stricter North American content requirements, known as rules of origin, have reshaped trade dynamics. Mexico’s recent performance in auto part exports underscores the impact of these regulations, with shipments totaling US$13.5 billion in the first two months of 2024, marking a 41.1% increase compared to the same period in 2018.

“The growth (of Mexico) remains very strong. We’re just one step away; we’ve recently surpassed Germany to secure the fourth position. Japan is facing challenges, but we’re growing considerably, and Japan is shrinking, so we’re in a competitive position to aim for the third spot in the coming years”, said Francisco González, President, National Autoparts Industry (INA).

USMCA’s rules of origin have been subject to interpretation disputes among the member countries. While the United States advocated for a more stringent approach to calculate North American content, Mexico and Canada argued for a more flexible interpretation to assist North American producers in meeting content requirements.

The USMCA also mandates an increase in the Regional Value Content (RVC) from 62.5% under NAFTA to 75%, with a gradual growth to this threshold by 2023. The agreement also introduces wage requirements stipulating that 40 to 45% of automobile content must be produced by workers earning at least $16 per hour.

Despite these regulatory shifts, the full impact of the rules of origin may not be apparent until the agreement is fully implemented in 2027 or later, according to the US International Trade Commission (USITC).

Mexico’s automotive industry’s robust performance extends beyond exports, with domestic production reaching record levels in January 2024. The sector reported a 9.14% growth compared to January 2023 and a significant increase of 29.2% compared to pre-pandemic levels in 2019. This growth is attributed to nearshoring initiatives, which have expanded manufacturing operations to states traditionally not associated with the automotive industry.

“Another factor that will push Mexico to become a major player in automotive supply is electromobility, because more green cars are already being manufactured, and having safer supply and logistics in North America makes Mexico more attractive”, added González.

Source: Mexico Business