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News Article

Mexico’s Rise in the Global Automotive Industry

Thu, 09/22/2016 - 09:21

Continuity, transparency and education have underpinned the state of Guanajuato’s drive to the center of the automotive industry, which will see investment grow, said Miguel Márquez Márquez, Governor of Guanajuato, to open the Mexico Automotive Summit 2016. “Three pillars have been the key to our success: continuity in economic public policy throughout administrations, transparency and the ease of doing business, and education,” he said.

The central-west region of the country is known as the diamond of Mexico and Guanajuato is its heart, Márquez said. The state has advantages that make it one of the top destinations for the automotive industry, including its young demographics, educational facilities and its enviable position near the US border. The northern crossing point at Laredo and Manzanillo and Tampico ports can be reached within one day by truck, thanks to the state’s developed infrastructure.

7,000 engineers in Guanajuato demonstrates exponential growth in higher education participation.

In the past nine years over US$10 billion of investment has poured into the state’s automotive industry, accounting for 73 percent of the total investment the state has attracted over the same period. The number is expected to reach US$12.4 billion by the end of the current administration, with 88,300 new jobs created by 2018, Márquez said.

The governor pointed out that support from both past and current state administrations has been key to the development of the industry. “Continuity and long-term vision have been Guanajuato’s secret. Since 1994, when we decided that we were going to bet on the automotive industry, every governor has made his contribution to its development,” said Márquez.

A favorable climate for business is another factor. Guanajuato has repeatedly landed in the top 3-5 places on the World Bank’s Doing Business index, which Márquez attributed to the state’s political and social environment. This business-friendly atmosphere combined with governmental transparency makes Guanajuato one of the most dynamic hubs for the industry, he said.

The governor added that education is industry’s backbone. Approximately 7,000 engineers graduate every year from universities in the state. Public high schools and technical schools work to implement international good practices and Celaya’s Technological University is expected to be completely bilingual in the following years. “Education is a priority,” he added. “We are putting universities in zones that have been neglected.”

The state’s future looks bright, Márquez said. By 2020, he expects Guanajuato will manufacture 1.5 million vehicles, almost doubling the 763,000 units currently assembled. The manufacture of engines is expected to climb to 1.8 million from 932,000 units and the number of transmissions manufactured is expected to grow to 2.3 million from 1.1 million units. The future opening of manufacturing sites of companies such as Pirelli will also help boost the production of tires to 5 million from 2 million units.

Other industries are also making inroads, the Governor said. Guanajuato’s 14 medium-sized cities, including Leon, Irapuato, Salamanca, Celaya and San Miguel de Allende, are all within a half-hour’s reach, allowing for economic diversification. This has allowed the growth and success of industries such as agrofood, metal mechanics and tourism.

“We are betting on the automotive industry without neglecting other economic poles,” said Márquez. The state’s airport transports more than 1.5 million passengers per year and is among the five most competitive airports in the country, he said, permitting Guanajuato to become a business platform for North America.

The benefits from the automotive industry are not exclusive to the state but are beneficial for the entire Bajio region, Márquez said. “Investment from the automotive industry is no longer a matter of competition between states. We complement each other.”

“In the past nine years over US$10 billion of investment has poured into the state’s automotive industry.”