/
News Article

Mexican States Driving Automotive Investment

Tue, 09/30/2014 - 17:27

Esaú Garza de Vega kicked off by mentioning investments by Nissan and Daimler in Aguascalientes, which are set to make it the main producing state of light vehicles in Mexico in the coming years. The introduction of the Secretary of Economic Development for Aguascalientes was followed by a video which mentioned the necessary infrastructure and economic development of Aguascalientes, which has maintained the lowest inflation rate in Mexico since 2012. It has been named the second best state to do business in Mexico, as proven by Nissan’s investment to expand its plant in Aguascalientes, which represents one of the largest private investments ever made in Mexico. These advantages will combine to allow Aguascalientes to produce over 1 million cars annually by 2017 in a sector that already represents over one third of the state’s GDP.

Esaú Garza de Vega then mentioned that Japan is the main investor in the state, accounting for 46% of the FDI made in the automotive industry so far. Other investing countries include the US, Germany and France, with suppliers from Germany establishing themselves bot in Aguascalientes and San Luis Potosi to supply the Daimler and BMW facilities in these two neighboring states. The Secretary also focused on the state’s supplier development program of the state, which aims to build a platform to link suppliers in Aguascalientes to OEMs in the state and beyond. The Nissan school in Aguascalientes, which provides specialized training, is another initiative which proves the commitment of the state government to the automotive industry, since students who attend this school have their fees paid for by the government. The total potential of the state can be seen in its growth data for the first quarter of 2015, which reached a record high of 9.8%, a growth rate superior to even those of booming economies like China.

states

Speaker: Fernando Macias Morales, Secretary of Economic Development for San Luis Potosi

Macias Morales projected a video about the attractiveness of San Luis Potosi, which showed the commitment of foreign OEMs and suppliers to the state. The video mentioned SLP one of the most promising zones in world for direct investment, as the third most important state in Mexico for energy generation and fourth in the production of auto parts. Despite this success, Macias Morales mentioned the importance of states supporting each other for the good of the country.

Currently, 141 companies in SLP are involved in the production of both vehicles and auto parts. Additionally, the automotive cluster in San Luis Potosi is now being planned in conjunction with a logistics cluster and will allow suppliers in SLP to connect to other state markets in the country. Macias Morales mentions that this structure is planned of a seamless integration of various investments in SLP, which are all being aimed at achieving controlled and sustained growth in the medium and long-term.
The SLP automotive sector received a major boost in the midst of the 2008 economic crisis when General Motors announced its plant there. Though, SLP was criticized at the time for this relationship, Macias Morales states history proved the state right as the GM plant now produced just under 130,000 units last year. However, one of the most exciting pieces of news in the automotive industry was the announcement of a BMW plant in SLP. This plant plans to produce 150,000 units per year by 2020, using the famed German OEM’s plant in Leipzig as a model. For Macias Morales, BMW’s choice to invest in SLP represented a long process of planning and evaluation coming to fruition. “This process took into consideration the state’s security, human talent, environmental factors, geology and soil, and its supplier base. After BMW delivered its evaluation of SLP, the state took upon itself to technically and honestly enhance those areas that were not up to BMW’s standards of BMW. The total investment we are to make between 2015-2019 will amount to MX$54.5 billion and a creation of 135, 390 jobs,” concluded Macias Morales, adding that such a commitment would be worth it, given the economic clout it would add to the state in the medium and long-term.