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 

US tech giants are betting on Mexico as the next hub for artificial intelligence (AI) chip manufacturing.

According to a recent WSJ publication, this decision not only seeks to diversify production outside China, but also to take advantage of the free trade agreement between the United States, Mexico and Canada (USMCA).

Foxconn, known for being the world’s largest contract electronics manufacturer, has responded to demand from US companies by increasing its investments in Mexico.With US$690 million over the past four years and the acquisition of land in Jalisco for US$27 million, Foxconn is significantly expanding its production of AI servers.

According to the report, leading companies such as Nvidia, Amazon, Google and Microsoft are using Foxconn’s facilities in Mexico to meet their AI server needs. This move is part of a broader strategy to reduce dependence on supply chains from China, considered a political adversary of the United States.

According to Foxconn data, Mexico has proven to be a profitable investment, shaking up international trade with imports from the country and surpassing those from China for the first time in two decades. However, the country faces challenges such as high crime rates and wage competition for skilled workers in high-tech assembly.

However, Mexico has attracted not only AI hardware manufacturers, but also several automakers. According to data published by the International Organization of Motor Vehicle Manufacturers (OICA), car manufacturing in Mexico experienced a 14% increase in year-on-year comparison and reached the figure of approximately 4 million units in 2023. This figure marked a year of remarkable growth for the country’s automotive sector.

Naturally, this also implies a general trend within the industry towards “nearshoring” as a key strategy, bringing production closer to core markets to streamline deliveries, improve supply chain transparency and optimize operational efficiency.

With tech giants at the forefront, redefining their manufacturing strategies, we are likely to see a significant transformation. This movement could inspire more companies to explore alternative manufacturing hubs that promise strategic and economic advantages for Mexico.

Source: Mexico Now

During 2023, San Luis Potosí accumulated 1.658 billion dollars in automotive investments, thanks to its 10 projects, seven of which correspond to the electromobility sector, with BMW’s investment of 872 million dollars standing out.
San Luis Potosí, Mexico, February 6, 2024.- Directorio Automotriz, the automotive sector’s business link and intelligence platform, revealed data on investments in the mobility industry in Mexico with the publication of its whitepaper ‘Automotive Investment Report 4Q 2023’. This document gathers the most important results of Foreign Direct Investment and Nearshoring in the automotive industry during the fourth quarter of 2023, as well as a summary with investment results from January to December of that year.

Regarding the results of the fourth quarter of 2023 (October-December), Mexico accumulated $3,065.56 MDD in automotive investments, which indicates a drop of -33. 2% against the same period of 2022; in view of this, it is worth remembering that 4Q 2022 represented a record for that quarter in automotive investment, this, added to a small slowdown in the sector towards the end of the year explains the result, which is not bad, since, although the total amount is lower, the number of projects increased 12.9%, with a total of 70 in the fourth quarter of 2023.

INVESTMENTS FOCUSED ON THE AUTOMOTIVE GROWTH OF SAN LUIS POTOSÍ

The report also highlights that the Mexican states that registered the largest investments during the period from January to December 2023 were Nuevo León, with 43% of the national total (US$ 8,024.10 M), followed by Coahuila with 18% (US$ 3,418.25 M) and San Luis Potosí with 9% (US$ 1,658.3 M).

Comparison of states and their automakers 2023

In particular, San Luis Potosí consistently maintained its position in third place thanks to BMW’s US$872 million investment for its new electric vehicle assembly line and a high-voltage battery manufacturing plant, carried out in the first quarter of 2023.

During the same period, Steel Dynamics, the third largest steelmaker in the United States, acquired the land for the Ford plant for a total of US$103 million, which included the ownership of 280 hectares and the generation of up to 3,000 jobs for a new foundry plant.

In addition, in the second quarter of 2023, San Luis Potosí received an investment of 372.6 million dollars from the Chinese company Asiaway for die-casting processes (HPDC) and aluminum and zinc machining for auto parts.

During the same period, TAXAN Mexico, an electronic card manufacturer, began construction of its new facilities in the Millenium Industrial Park in San Luis Potosí, with an investment of US$40.6 million, with the goal of producing 500,000 items per month.

In the third quarter of 2023, San Luis Potosí received an important investment from Tier 1 BorgWarner, which allocated US$198 million to expand its production in Villa de Reyes, focusing on the manufacture of electric motors, power electronic components and electronic circuits.

SAN LUIS POTOSÍ WILL CONTINUE TO ATTRACT INVESTMENT IN 2024

San Luis Potosi’s participation in the automotive industry allowed the generation of 7,980 new jobs and an industrial construction area of 295.9 hectares in 2023, the same period in which 10 projects were completed in the state, 7 of which were focused on electromobility, which responds to the growing demand generated by BMW’s new production line.

Accumulated amount by state (2023)

Regarding electromobility, it is predicted that more companies related to electromobility will arrive to connect with the North American market and could be established in areas close to Nuevo Leon and Coahuila, such as San Luis Potosi, where there is a great opportunity to develop industrial spaces to house these companies.

In relation to this growth, Adrian Martinez, Content Area Leader of Cluster Industrial, expressed on September 8, 2023 during the webinar ‘Electromobility in Mexico: Current Data and Projections until 2024’: “There are auto parts that we are going to stop using and there is an important migration by manufacturers to move their business models to components related to electromobility, which are experiencing accelerated growth”. This underscores the need for transition and positions San Luis Potosí as a leader in electromobility in Mexico.

Source: Cluster Industrial 

At least seven car assembly plants are considering setting up operations in Mexico, five of which are of Chinese origin and are looking to install their plants in Nuevo Leon.

The general director of Colliers in Monterrey, Sergio Reséndez, revealed that during a meeting that the Colliers team had with the Mexican Ministry of Economy, it was mentioned that there are seven automakers that are evaluating setting up in the country.

Reséndez informed that three of these companies have already visited the state to evaluate the infrastructure and that there will be more news after the second half of the year, after the elections.

Supply of all types of products

“Nuevo Leon is leading in a total of three or four states that are already finalists, these are Coahuila, Chihuahua, San Luis Potosi and Zacatecas,” he said.

Likewise, the general director pointed out that there is a Chinese company that manufactures electric or traditional or conventional vehicles, which is about to make a decision and would need all kinds of suppliers.

Due to the advantages that Saltillo and Monterrey have as suppliers for the value chain and the generation of jobs, he emphasized that these entities will always appear in the list of analysis for the installation of automobile assemblers.

Key points

“In the Monterrey-Saltillo corridor there are all kinds of suppliers that could supply any of the assembly plants that are already in Nuevo León, as well as a new one,” he pointed out.

From 2021 to date, more and more Chinese brand companies have been placed, according to statistics from the National Institute of Statistics and Geography (Inegi), in 2023, 19.5% of cars sold in Mexico were Chinese.

Business confidence in manufacturing grew 3.8% for the year.

Source: Mexico Industry

Tech global leader Siemens inaugurated “ITESA 4,” a new manufacturing plant in Ciudad Juarez, Chihuahua. The new plant involved a US$17.4 million investment and aims to address the growing demand seen in the North American market, especially in the housing sector.

The new manufacturing plant will manufacture products to measure and distribute energy. “In Siemens, we are committed to continuous innovation… we will keep collaborating as a strategic partner in Mexico and continue boosting its position as a leader in digital, safety, and sustainability electrification,” says Alejandro Preinfalk, President and CEO, Siemens Mexico, Central America, and the Caribbean.

The plant will be built during four stages and construction is expected to be finished by the end of 2025. Siemens will install four assembly lines and transfer another six. The plant will have capabilities for CNC stamping, metal bending, welding, and painting, among others, for metallic components and aluminum bars.

The expansion is expected to boost the company’s exports by 16%, allowing it to meet the demand in its main market, says Rolando Calderón, Head of Manufacturing, Electrical Products, Siemens Mexico, Central America, and the Caribbean.

Maria Granados, Ministry of Innovation and Economic Development of Chihuahua, highlighted that Siemens’ expansion will generate employment, as it has already created over 260 direct jobs.

The project focuses on productivity and operational efficiency, reinforcing the company’s position as a strategic hub for manufacturing and distribution in the electrification market. “We are committed to reimagining our scope while reinventing our processes to lead the electrification of homes, industries, and societies,” says Marco Cosío, Vice President of Smart Infrastructure, Siemens Mexico, Central America and the Caribbean.

Source: Mexico Business 

Juan Carlos Valladares Eichelmann, Secretary of Economic Development (SEDECO) of San Luis Potosí, and executives of Unison Shanghai laid the first stone of the new plant that will operate in San Luis Potosí.

The Chinese company will invest US$400 million and plans to generate 3,000 new jobs with the new manufacturing complex.

According to the agency, the new plant will strengthen the company’s presence in the region and promote economic growth.

The event was attended by Winsong Weng, Vice President of Overseas Operations of Unison Shanghai; Daniel Lagunas López, Municipal President of Villa de Reyes; and Michelle Porrino, Director of the WTC Industrial Park.

The executives highlighted the importance of this investment for economic development and job creation in the region.

Specializing in the manufacture and assembly of auto parts, Unison Shanghai excels in the production of body parts and components for electric vehicles.

Source: Mexico Now 

The nearshoring boom has benefited Mexican industry, but it has also made more evident the challenges the country faces in receiving investors, mainly in terms of logistics infrastructure.

Josefina Moisés, general director of the Mexican Association of Real Estate Fibers (AMEFIBRA), assured that 500 companies attracted by nearshoring took their factories, production lines and distribution centers out of Asia to move them and install them in Mexico.

“Around 500 companies have established themselves in the country, boosting the demand for industrial space as a result of nearshoring,” said the representative.

According to the leader, the nearshoring boom has benefited Mexican industry, but it has also made more evident the challenges that the country has to receive investors, mainly in terms of logistics infrastructure.

Some of the main opportunities for a solid growth of the real estate industry in Mexico are in nearshoring, tourism and infrastructure.

“We have a good labor force, but also the macroeconomic stability, interest rates and stable exchange rate allow investors to evaluate the relocation of their production areas to Mexico,” she said.

The general director of AMEFIBRA said that the arrival of new companies has triggered a demand for industrial parks, so work must be done to improve the road and telecommunications network:

“All this in order to provide great benefits to foreign companies so that they decide to locate in our country,” she mentioned.

He recalled that the real estate market continues to be a solid and reliable option, capable of resisting global economic crises, despite the risks inherent to any investment, he said.

Mexico’s strategic location and good property costs, diverse types of industries, growing market, beneficial business conditions, low labor costs and cost savings are attractive, said Josefina Moises.

The Ministry of Economy informed that foreign direct investment (FDI) at the end of the third quarter of 2023 stood at 32.926 billion dollars, registering an increase of 30 percent compared to the 25.272 billion dollars reached in the same period of 2022.

The agency highlighted that the increase is the result of the confidence of foreign investors due to the good business environment and the country’s economic stability.

“Although there are a large number of properties, warehouses and industrial parks in Mexico, the choice of the most suitable one will always depend on the needs and objectives of each company, like a tailor-made suit,” said the executive.

During 2022, supply increased and closed the year at 3.98 million m2 , increasing by more than 290 thousand m2 since the beginning of the year. Even so, supply remains compressed due to the strong demand for industrial space and several conditions that have created obstacles to the development of new speculative projects.

Among these conditions are energy shortages, rising land prices, and the general rise in the cost of construction inputs and interest rates.

FIBRAs currently have more than 2,000 properties with more than 35 million meters of GLA, and more than 500,000 jobs have been created, 50,000 directly and 450,000 indirectly.

“Another point to highlight is that developers in Mexico are implementing the construction of sustainable buildings,” said Josefina Moises.

Strategies will have to be implemented to enable the implementation of new technologies, achieving long-term savings of at least 40 percent in energy, 20 percent in water and 20 percent in energy embedded in materials by 2050.

Source: Forbes

In 2023, the year was marked by the relocation of companies (nearshoring) at a global level. In Mexico, this phenomenon was a trigger for the industrial real estate sector, which was reflected in construction indicators.

According to Solili, a real estate data platform, throughout 2023, the development of more than 350 industrial projects began in the various Mexican markets under pressure from the demand of companies wishing to relocate their production centers to the country, in order to take advantage of the proximity to the United States.

Thus, by the end of December, a total of 5.6 million square meters of industrial buildings were reported under construction nationwide.

Despite the fact that construction did not stop throughout the year to satisfy the reconfiguration of supply chains, an analysis conducted by Banco Base stresses that nearshoring is “a golden opportunity that is not being fully exploited”. It is estimated that Mexico receives only between 10% and 20% of foreign investment flows due to company relocation.

“These investment flows are highly focused on certain states and manufacturing subsectors. In fact, there are entities where nearshoring continues to be a myth, as they have not received new investments,” reads the bank’s report.

It is worth mentioning that in 2023, Monterrey stood out for the announcement of an investment of more than US$5 billion by Tesla; however, the city was already emerging as one of the winners of nearshoring prior to this event, due to its geographic location, its infrastructure and its manufacturing vocation developed over the years.

With more than a hundred projects, the city of Monterrey exceeded 1.5 million square meters of new industrial buildings in construction last year, according to Solili. The second quarter was the most dynamic in the region, since the execution of 31 industrial buildings began.

Source: Mexico Now