President Claudia Sheinbaum announced a US $5 billion investment in Mexico from Amazon Web Services during her daily press conference on Tuesday.

The investment, which will be distributed over the next 15 years, is aimed at developing a new digital “region” in Mexico’s Querétaro state. With it, Amazon expects to establish Mexico as a hub for digital innovation in Latin America.

Amazon Web Services (AWS) plans to train 400,000 people to manage the Querétaro infrastructure cloud region. This builds upon AWS’s commitment to developing Mexican talent, having trained 500,000 Mexicans in cloud skills since 2017.

“[The] new Amazon investment of $5 billion in Querétaro. 200,000 people will be trained and educated, it will generate an additional $10 billion for the GDP, and we will be ready for artificial intelligence. Plan México is moving ahead!” Mexico’s Economy Minister Marcelo Ebrard wrote on the social media site X.

Plan México, announced by Sheinbaum and members of the Economy Ministry (SE) on Monday, seeks to attract $277 billion in domestic and foreign investment across 2,000 projects in the next six years.

AWS said the new digital region will help customers run workloads and securely store data via Mexico’s data centers. The company first announced plans to develop data centers in Mexico last February in response to the growing demand in Latin America for cloud services.

“Our commitment is to democratizing access to advanced technologies such as artificial intelligence and cloud computing, promoting a more equitable, innovative and competitive Mexico at a global level,” AWS Vice President for Latin America Paula Bellizia said during Sheinbaum’s press conference.  Bellizia also said that the investment is expected to support the creation of “7,000 highly qualified and full-time jobs” per year.

According to Amazon, the construction and operation of the new center in Querétaro will add about $10 billion to Mexico’s gross domestic product.

“One way to accelerate the impact on the Mexican economy is the adoption of artificial intelligence and we know that it is central to the government of President Claudia Sheinbaum,” said Bellizia on Tuesday.

With reports from El Economista, La Jornada and The Wall Street Journal

The Netherlands, Belgium and Germany are reinforcing their interest in Mexico, reflected in a growth of foreign direct investment (FDI) in the country.

Among these, the Netherlands leads the increase with an investment of US$1.9 billion through the third quarter of 2024, which represents a 238% growth compared to the same period of 2023, according to data from the Ministry of Economy.

Belgium also increased its participation, reporting an investment of US$1.5 billion, an increase of 101%. For its part, Germany registered an FDI of US$3.8 billion, marking an increase of 34.2%.

The National Council of the Maquiladora and Manufacturing Export Industry (Index) notes that Europe is also focusing its sights on Mexico in terms of how to set up companies and how they can join the value chains, becoming suppliers to be incorporated into production lines and then export to the United States.

But Index points out that it is not a matter of triangulation, as is thought of Chinese companies, because there has to be a change in tariffs and a transformation in the product.

The data indicate that in all cases they are concentrated in the manufacturing sector, in the case of the Netherlands and Germany they are directed to the automotive sector.

From January to September 2024, the Netherlands registers an FDI of US$1.4 billion for the manufacture of transportation equipment, being the most representative; in second place, with a more conservative value, is the beverage industry, with US$204 million.

Germany focuses its investment in the manufacture of cars and trucks, with US$1.4 billion, and in auto parts, with US$1 billion.

Belgium’s record, for said period, only shows that it is for manufacturing industries; however, in the information of the commercial relationship of the Ministry of Foreign Affairs, an investment in beverages and tobacco is identified.

Regarding the type of investment, from January to September 2024, intercompany accounts, which are transactions originated by debts between companies established in Mexico and other related companies residing abroad, represent 71% of the total; reinvestments, with 28.3%; and new investments, with only 0.3%.

Source: Mexico Now

INA projects that Mexico will produce 127,500 MDD in auto parts by 2025, a growth of 2.42% over 2024. In 2024, FDI would reach 2,550 MDD, with electrical harnesses as the main component.

Mexico City, January 9, 2025. – At a press conference, the General Director of the National Auto Parts Industry (INA), Gabriel Padilla Maya, presented the sector’s growth projections for 2025, highlighting that the industry will continue its positive trajectory supported by its production capacity, a robust export environment and a favorable trade balance, due to factors such as the implementation of the Mexico-US-Canada Agreement (T-MEC), nearshoring, growing foreign direct investment and expansions of plants already installed in our country due to the growth in demand within the North American region.

In addition, Padilla Maya mentioned that it is estimated that by the end of 2024, total auto parts production in Mexico will reach $124,484 million dollars, which would represent an annual growth of 3.52% compared to the end of 2023. Similarly, based on current dynamics and demand expectations in the North American region, INA projected that auto parts production in Mexico by the end of 2025 will reach US$127.5 billion, which would represent a growth of 2.42% with respect to 2024.

However, he also highlighted the challenges posed by the trade scenario in 2025, with declarations on tariff policies that could increase export costs to the United States. Despite these challenges, the sector continues to consolidate itself as a leader in the global supply chain, demonstrating a diversification and expansion of the industry in regions of Yucatan, Zacatecas and Guanajuato.

Regarding the trade balance, the association highlighted that Mexican auto parts exports reached $90.9 billion dollars in the January-October 2024 period, with the United States being the main destination with 88% of total exports. At the same time, he explained that the sector’s imports also follow a growing trend, with the United States representing 52.3% of total auto parts imports, reflecting a positive trade balance of $32.472 billion dollars.

The Director General of INA highlighted the key factors driving the growth of the sector in Mexico: the T-MEC and its Regional Content Value requirement, which promotes the integration of the production chain in North America; 87% of the auto parts produced in Mexico are destined for export, with the United States as the main trading partner; the nearshoring phenomenon, which has attracted new investments and generated greater demand for auto parts; and the expansion of plants in Mexico due to the growth of demand in the North American region. These elements consolidate Mexico as the main auto parts supplier for the North American region in the coming years.

In terms of investment, Padilla Maya indicated that FDI in the sector reached $2.302 billion dollars during the accumulated January-September 2024, reflecting a growth of 18.07% compared to the same period of the previous year and, by the end of 2024, he estimates that FDI will reach $2.550 billion dollars, which would imply a growth of 25.46% with respect to 2023. He also highlighted that the investment outlook for 2025 is equally positive, with a growth forecast of 5.88%, reaching $2.7 billion dollars.

Finally, Gabriel Padilla said that, among the main auto parts components manufactured in Mexico, electrical harnesses continue to have the largest share, representing 19.50% of total production. They are followed by transmissions and clutches (10%), fabrics, carpets and seats (9.04%), engine parts (7.86%) and suspensions and steering (6.68%). Together, these products make up more than 50% of domestic manufacturing.

Source: Cluster Industrial 

The German company FUCHS announced an investment of millions of dollars for its installation in San Luis Potosí, for the next few years.

This was announced by Jesus Salvador Gonzalez Martinez, head of the Secretariat of Economic Development (SEDECO) in the state. This operation was agreed after a meeting with executives of the German company in San Luis Potosí. The German automotive supplier FUCHS will invest a total of US$14.7 million.

After the announcement, state authorities emphasized that the investment is the result of the continuous work of the State Government through SEDECO.

The German company FUCHS, world leader in lubricants, will be located on a 51,731.75 square meter site in the WTC 2 Industrial Park, located in Villa de Reyes. It will begin operations in January 2026.

It will also have advanced logistics infrastructure, including a railroad spur. This structure will enable efficient distribution of products to local and regional markets, significantly improving the company’s connectivity.

Source:Mexico Now

The Chinese-British automaker MG Motor has announced a significant investment of US$1.05 billion to establish a manufacturing plant in Mexico, as part of its new phase of growth in Latin America.

This phase, called “MG 2.0,” will position the Mexican market as the core of the brand’s expansion in the region, according to Zhang Wei, president of MG Motor Mexico, during an event commemorating the company’s fourth anniversary in the country.

The manufacturing plant will have a production capacity of 100,000 units per year and will be built with an investment of US$450 million in infrastructure and US$500 million in equipment.

Although MG Motor has not yet disclosed a construction start date or its exact location, the facility is shaping up to be a cornerstone of the brand’s supply strategy, not only for Mexico, but also for other Latin American markets.

“Mexico is not only consolidating its position as the second most important market worldwide for the SAIC Group, but is also becoming the driving force behind a new era of growth and development throughout Latin America,” said MG Motor Mexico’s CEO.

With the goal of expanding its coverage to 34 countries in the region by 2025, MG Motor envisions Mexico becoming a key production center.

Nava emphasized that the strategic plan includes assembling popular models in the region, such as SUVs and sedans, to meet the growing demand of the Latin American market.

Source: Mexico Now

According to the National Institute of Statistics and Geography (Inegi), during the second quarter of 2024, the value of exports by state reached 139.354 billion dollars.

The states with the highest contribution to the total value of exports were:

1. Chihuahua: 13.1% 2.
2. Coahuila: 12.7% 3.
3. Baja California: 10.3% 4.
4. Nuevo Leon: 9.9% 5.
5. Tamaulipas: 6.6% 6.
6. Guanajuato: 6.4%.

During this period, manufacturing exports accounted for 90.8 percent of the total value of exports from the states. This was followed by mining (oil and non-oil), with 5.8 percent, and the agricultural sector, with 3.5 percent. At an annual rate, the value of exports from the states increased by 3.1 percent.

By economic sector, manufacturing exports increased by 4.4 percent and agricultural exports by 0.9 percent. Mining exports decreased 13.0 percent.

In the second quarter of 2024, exports of transportation equipment manufacturing stood out with 40.3 percent of the total value of total exports; of computer, communication, measuring and other electronic equipment, components and accessories,14.9 percent; and of accessories, electrical appliances and electric power generation equipment, with 6.2 percent.

The states that stood out in transportation equipment exports were Coahuila (21.2%), Guanajuato (11.3%), Chihuahua (8.7%), Nuevo León (8.1%) and Puebla and San Luis Potosí (7.3% each), accounting for 63.8% of the total value of these exports.

Source: Mexico Industry 

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