Manuel Russek Valles
Secretary of Economy
View from the Top

Chihuahua Seeks to Build on its Automotive Investment History

Mon, 09/01/2014 - 11:44

Q: How has your government been promoting the growth of the automotive industry in Chihuahua?

A: We are seeking to promote the automotive industry on a global level. We are not only focusing on North America but also on Europe and Asia to attract automotive investment to the state. We estimate that given the strength of our export manufacturing industry, we could see 30% growth in Chihuahua’s automotive sector. We also want to shift from a labor-intensive workforce to a highly skilled workforce. In order for that to happen, we are looking to secure an OEM setting up a plant in Chihuahua. The government is establishing clear policies for investment, clarifying the incentives it is putting in place to bring investment to the state. The incentives and our talented workforce are Chihuahua’s major cards in attracting investment. Once the first OEM comes here, we will see a boost for the automotive industry and Chihuahua as a whole. The rise of Asia as a crucial economic market means that we are targeting that market to bring an OEM here. Although the Bajio is doing a phenomenal job at developing its own automotive sector, Mexico’s northern states will continue to grow. We offer natural advantages to conquer the Asian market and get an OEM here to export its vehicles to the US.

Q: What incentives is this government going to provide to continue its success in attracting automotive investment?

A: The first incentive is to provide land for an OEM to build its facilities. We can also offer incentives on taxes, infrastructure, the labor force and the shelter program to ensure a company entering Mexico can do so without facing any labor or fiscal problems. Added to that, Chihuahua has gone ten years without seeing a single strike and our legal framework is adapted to the particular working conditions of the state. Apart from these economic incentives, it is important to know that the business environment in Chihuahua is tailored to bring in investment. We are seeking to develop a long-term economic and industrial development plan for Chihuahua, and we are working with the private sector and education institutions to make that happen. We need to set medium and long-term objectives for Chihuahua for the next three, ten and 20 years. Having these plans in place will mean that even when the government changes, targets will remain clear and subsequent administrations can continue working toward them. The governor has launched an initiative to create the Competitiveness and Innovation Institution, as a result of our strategic planning. We looked at the similar institute that exists in Monterrey as an example but we adapted its format to the needs of Chihuahua. This institute will create public policies on innovation to help make the whole state more competitive. Our administration is certain that investment in education and knowledge will lead to growth.

Q: What advantages does Chihuahua’s automotive cluster offer an OEM over other such clusters in Mexico?

A: We have certified sites, we have excellent infrastructure and we have a lot of space to offer. There is a lot of land where OEMs could establish themselves. We also already have a wealth of experience in knowing how to treat foreign companies that invest here. Chihuahua was one of the first states to bring foreign investment to Mexico so we know how to grow business here. In terms of infrastructure, we are also building a new rail line to access New Mexico and Union Pacific is developing an intermodal terminal near Ciudad Juarez.