Jalisco Boosts Automotive SMEs
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Jalisco Boosts Automotive SMEs

Photo by:   Government of Jalisco
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Héctor Soto By Héctor Soto | Journalist & Industry Analyst - Wed, 08/30/2023 - 14:15

To help SMEs capitalize on opportunities arising from the relocation of electric automotive production chains, Jalisco’s government and private sector launched the first Nearshoring and Electromobility Forum.

The event was hosted by Jalisco’s Department of Economic Development (SEDECO), in collaboration with the Jalisco Automotive Cluster. The Nearshoring and Electromobility Forum aimed to boost the state’s automotive sector and help its companies integrate themselves into electric automotive production chains.

"The opportunity for Mexico and Jalisco lies in becoming a part of the supply chain resulting from the global value chain restructuring pursued by multinational corporations, seeking proximity to the largest consumer globally – the US," says Roberto Arechederra, Head, SEDECO. 

SEDECO highlights that a substantial portion of Jalisco's exports, totaling US$27.295 billion in 2022, were directed towards the US. Notably, the automotive sector constituted US$3.5 billion of this export figure.

Carmen Hernández, Director, Jalisco Automotive Cluster, underscores the importance of Mexican manufacturing in the US’s automotive sector. "Currently, 21% of the value of a US-manufactured car originates from Mexican production," says Hernández. "Jalisco's industry now holds an unprecedented opportunity to capitalize on the nearshoring phenomenon."

"In 2022, Mexico's auto parts sector emerged as the leading recipient of nearshoring investments, attracting 37% of the total capital inflow and plant relocations," adds Hernández. China was the primary source of these investments, contributing 40%.

Jalisco Automotive Cluster has worked for many years in promoting the state’s automotive industry. “We have worked closely with SEDECO Jalisco, taking part in meetings held with foreign companies looking for investment destinations. In the automotive sector, we have insisted on the benefits the state offers, particularly in auto parts. The state still has room to take advantage of its high-quality production capacity,” Hernández tells MBN.

To continue advancing, the event’s organizers are planning a business meeting in November, aiming to facilitate connections between automotive component companies based in Jalisco and potential buyers in Mexico and abroad. The primary objective is to integrate Mexican companies  into the evolving global production networks that are increasingly shifting towards Mexico.

The inaugural forum and the upcoming business meeting are poised to be instrumental in propelling Jalisco's SMEs into pivotal roles within the dynamic automotive industry, capitalizing on the evolving trends of nearshoring and the surge of electromobility.

Photo by:   Government of Jalisco

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