Industry invests in Mexico
1/25/2023 Markets & Industries News

Industry invests in Mexico

Mexico's automotive industry attracts more investors than any other sector in the country. Almost all major manufacturers have opened production plants in the country and even more are planned.

Car body at EUROGUSS Copyright: NürnbergMesse/ Thomas Geiger

A quick review: In the first half of 2022, plants in the Latin American country produced about 1.7 million passenger cars, writes Germany Trade & Invest (GTAI), the economic development agency of the Federal Republic of Germany. That is 3.9 per cent more than in the previous year. At the same time, Francisco González, president of the industry association Industria Nacional de Autopartes (INA), announced that Mexico will have overtaken Germany in the production of automotive parts as early as 2021.

Now Mexico is considered the fourth largest producer worldwide. With almost 80 per cent, the USA is the largest buyer of vehicles produced in Mexico. The negative economic development of the USA in the first and second quarters of 2022 therefore caused corresponding concern, but the worry dissipated when growth picked up again in the third quarter. Besides the States, Canada, for example, is also an important sales market for Mexico. 

What makes Mexico manufacturers and suppliers so attractive

Its strategic location in the middle of the American continent and between East Asia and Europe offers Mexico logistical advantages, says the Bavarian Representative Office Mexico. For example, important cities in the USA are only a few hours away by plane, containers to the ports on the east and west coasts take only a few days, Yokohama can be reached in less than 20 days and the airports of Europe and East Asia are also easily accessible. 

In addition, "besides the free trade agreements, there are the competitive labour costs, the young and committed workforce, the good infrastructure, the historically grown automotive manufacturing culture and the advantage of manufacturing in the dollar area," according to CAMEXA, the German-Mexican Chamber of Industry and Commerce. 


Companies focus on expansion projects and e-mobility

The country benefits from the fact that many companies are moving their production from Asia to North America. So much so that there is hardly any vacant space in the existing industrial parks in northern Mexico, claim industry insiders at the GTAI. No wonder then, that well-known companies such as Nissan, Michelin, Bosch, LG Magna e-Powertrain and ZF Friedrichshafen are investing millions in the local automotive industry. The focus: tier 1 and tier 2 suppliers, expansion projects and e-mobility. 

Automobile production in Mexico has not yet reached pre-crisis levels. That automotive suppliers continue to invest in new plants says a lot about the potential the industry sees in the Latin American country. EUROGUSS MEXICO has therefore set itself the task of networking the markets. It gives exhibitors the platform they need to talk to players in Mexico in person.