San Luis Potosi: Resilient Automotive HubBy Jorge Ramos Zwanziger | Tue, 12/01/2020 - 11:54
San Luis Potosi has caught the eye of the global automotive industry, capturing significant foreign direct investment (FDI) during the first half of 2020. During 1Q20, San Luis Potosi and other four states from the Bajio region attracted significant FDI, reported El Economista. Later on, San Luis Potosi prevailed despite the economic blows the COVID-19 pandemic dealt on Mexican industries during the months of early confinement in Mexico, April through June.
The Ministry of Economy reported that during 2Q20, San Luis Potosi received MX$612.4 million (US$30.3 million), placing it just behind Jalisco in FDI. During that period, San Luis Potosi saw large amounts of foreign capital, more than bigger state economies such as Mexico City, State of Mexico, Nuevo Leon and Jalisco. Gustavo Puentes Orozco, Minister of Economic Development of San Luis Potosi, explained in El Universal that “it is not that a large number of companies arrived. A large part of this investment is from the large mother companies that sent capital and helped their subsidiaries in the state to buffer the blow.” On the other hand, San Luis Potosi suffered a large decrease in FDI in 3Q20, with the Ministry of Economy reporting a MX$66.7 million (US$3.3 million) loss. Despite this, people in the state remain optimistic that San Luis Potosi has, even more, to offer in the future, particularly in terms of the automotive industry.
Puentes Orozco highlighted the state’s long history in the automotive sector in an interview with MBN. “The first automotive company arrived in San Luis Potosi in 1968, by 2006 around 118 new automotive companies came to state or expanded their operations. By 2014, when BMW announced its investment, 110 new companies or expansions had happened. Moreover, from July 2014 to October 2019, we had around 110 new arrivals or expansions.” The Ministry aims to generate more conditions that foster economic development and a good quality of life, added Puentes Orozco. Alejandro Veraza, President of the Automotive Cluster of San Luis Potosi, when asked about fostering regional efforts, told MBN that the best opportunity for the Bajio region is economic growth. “Geographic location is indeed important, but what we are looking for are fewer imports and more local production. The region also concentrates a great number of automotive companies that could help new companies to come or current players to expand their operations.”