Nearshoring Brought US$2 Billion in October: The Week in Review

Mexico’s automotive industry keeps recovering, as nearshoring brought US$2 billion in Foreign Direct Investment (FDI) alongside 20 investments projects last month. The country’s heavy vehicle segment also grew sharply, with wholesale sales growing by 31.3 percent and retail sales by 22.4 percent. 

An initiative that seeks to bring electromobility to the country’s capital has been approved by Mexico’s City Environmental Commission Congress. Meanwhile, Chinese automaker BYD announced the launch of its newest premium brand by 1Q23. 

Ready? This is the Week in Automotive!

Audi Mexico Union Requests 18 Percent Wage Increase

The Independent Union of Audi Workers of Mexico (SITAUDI) asked for an 18 percent wage increase, which would make it the largest in Mexico’s automotive industry history. The National Chamber of the Transformation Industry (CANACINTRA) labeled the request as “irrational” and it invited staff at Audi Puebla to reflect on their request. 

BYD to Launch New Premium Brand in 1Q2023

The giant EVs manufacturer Build your Dreams (BYD) announced the launch of its premium brand Yangwang at the beginning of next year. Vehicles from the new line will be priced between US$110,287 and US$206,763. 

The automaker has not opened its doors to Mexico’s retail market but already has about 1,000 units operating in the country, thanks to a collaboration with the Mexican cleantech startup VEMO. 

Mexico’s Heavy Vehicle Segment Grows Sharply in October

The National Association of Manufacturers of Buses, Trucks and Tractors (ANPACT) reported that during the first 10 months of the year, the heavy vehicle segment continued the market’s upward trend, growing by 31.3 percent in wholesale sales and 22.4 percent in retail sales, when compared to the same period of last year. 

“We are in positive figures... We hope that the numbers reported during November and December will continue this growth trend, to reaffirm that we are an exporting power,” said Miguel Elizalde, Executive President, ANPACT. 

Nearshoring Brought US$2 Billion in October

Mexico keeps being a key player for companies that seek to be closer to the US and Canada. According to Credit Suisse’s Mexico Nearshoring Tracker Second Edition, the country received at least 20 new investments projects in October 2022, with more than US$2 billion in FDI. The automotive sector being the largest attractor of these investments. 

The country has received a total of US$17.2 billion in FDI during the first 10 months of 2022, a 25 percent increase over last year. 

Electromobility in Mexico City is One Step Closer

An initiative that aims to sell exclusively EVs by 2040 and have by 2050 all ICE vehicles banned from circulation in Mexico City’s streets has been approved by Mexico’s City Environmental Commission Congress. The resolution still needs to be approved by the plenary of Mexico’s City Congress. 

"The Local Climate Change Strategy should consider the necessary incentives to promote measures that motivate an increased acceleration renewal of the vehicle fleet units for the sole existence in circulation of electric cars by the year 2040, as well as the relevant disincentives for the total elimination of internal combustion units by the year 2050."

Regularized Vehicles Sales to Surpass those of New Ones: AMDA

During a joint press conference, the Mexican Association of the Automotive Industry (AMIA) and the National Auto Parts Industry (INA) said that the sale of used imported vehicles will surpass the sale of new units during 2022, as an estimated 1.2 million foreign automobiles are entering Mexico this year. About 1 million of these vehicles are non-certified and only 200,000 of them comply with custom regulations, in great part due to the Regularization Decree, according to both organizations. 

RPM Starts Operations in Mexico

The logistics and transportation company will enter Mexico’s market, aiming to provide innovative and personalized supply chain solutions for the current demand for vehicle and freight transportation. 

"Establishing RPM Mexico is a huge milestone for the organization. Our network of valued customers and carriers will benefit from a highly efficient, quality-driven, talented workforce that will enhance our service offerings," said Sergio Gutierrez, CEO and President, RPM.

Guanajuato to Surpass US$5 Billion Investment Goal 

Ramón Alfaro Gómez, Minister of Sustainable Economic Development (SEDESU) of Guanajuato, highlighted the work that the government has done in attracting investments to the region, saying that Guanajuato will exceed its 2H22 goal of attracting US$5 billion in investment this month. 

"When we talk about logistics and transportation, there is no doubt that what has happened in Guanajuato in recent years has not resulted from luck; it has been a work with vision, the result of an economic development policy of continuity," said Alfaro.