South Korea Sets Sights on Mexico's Automotive Industry
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South Korea Sets Sights on Mexico's Automotive Industry

Photo by:   Mexico Business Publishing
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Perla Velasco By Perla Velasco | Journalist & Industry Analyst - Thu, 06/22/2023 - 13:28

More players are preparing to seize the nearshoring opportunity that Mexico presents. South Korea hopes to become an important player for the industry as it increasingly invests in the country. Meanwhile, Mexico City and the State of Mexico coordinate efforts to leverage on this opportunity.

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South Korea: Barely Mentioned Nearshoring Partner

South Korean companies are increasingly investing in Mexico's automotive industry. With over 100 South Korean firms already present, Mexico serves as a manufacturing hub for the US and Mexico markets. The trend is set to continue, driven by expansions and partnerships with major automakers like Kia, Toyota, Honda, and Nissan.

Mexico's Automotive Industry on the Road to Recovery

Vehicle manufacturing in Mexico is rebounding from the semiconductor supply crisis. Production is almost back to pre-pandemic levels, benefiting sales and export figures. By the end of 2023, the semiconductor shortage is expected to normalize, ensuring a steady supply for the automotive sector and a return to normality.

Auto Parts Companies Could Invest in Interoceanic Corridor

Auto parts companies are interested in investing in Mexico's Interoceanic Corridor project, but demand security, infrastructure and project continuity. The government offers fiscal incentives, but companies need assurance that their investments will not be interrupted. Infrastructure, labor and energy supply are crucial for the project's success. Talks have been held with automakers like Toyota and GM, but no investment plans have been confirmed yet.

Bati Heat Treatment Making Waves in Mexico's Automotive Market

Heat treatment companies play a vital role in optimizing metal components for Mexico's automotive sector. Bati Heat Treatment, a Türkiye-based company, entered the Mexican market in 2017. With a focus on technology and software implementation, Bati aims to minimize errors and enhance operations. Talent attraction is a challenge, but the company offers career development opportunities. Bati plans to expand into the aerospace, tool-making, defense and HVAC sectors while doubling its production capacity in Monterrey.

Nissan To Sell Over 20,000 Vehicles Per Month

Nissan Mexicana is ramping up production to meet the high demand in Mexico's automotive market, with monthly sales exceeding 20,000 units. With no semiconductor or component shortages, Nissan is ready to supply the growing market. In May 2023, Nissan had an 18.8% market share and sold 20,045 units, experiencing 42% YoY growth. Rodrigo Centeno, the incoming President, Nissan Mexicana, emphasized the importance of efficiency and quality to maintain the company’s leading position in the market. Nissan aims to offer value products and long-term investment value while continuing its growth trajectory.

CIIAM to Bring Together the Automotive Sector’s Global Experts

CIIAM XXI, the International Congress of the Automotive Industry in Mexico, will unite global automotive leaders and experts to create value and networking opportunities for the Mexican automotive sector. The event recognizes Mexico's emergence as a manufacturing hub, attracting investments and creating jobs. With a focus on the future of mobility, CIIAM XXI will showcase cutting-edge innovations in vehicle electrification, Industry 4.0, sustainability, and smart mobility. The congress aims to foster collaboration, knowledge exchange and alliances to advance the automotive industry in Mexico.

Ford to Boost Hybrid Vehicle Production in Mexico

Ford aims to increase domestic sales by focusing on hybrid car production in Mexico. The company believes that hybrid vehicles are the best option for transitioning to electromobility due to the lack of incentives and infrastructure. However, high costs and limited infrastructure hinder widespread adoption of electric cars in the country. Ford expects a 5% sales volume boost by the end of 2023. Despite rising sales of hybrid cars, Mexico lacks incentives and infrastructure compared to Europe and the US, making electric car sales challenging.

The Next Generation: ZEISS PRISMO Family

ZEISS PRISMO CMMs lead in precision and are considered the future of accuracy. Combining speed, flexibility and productivity, they ensure top product quality while maximizing output and minimizing rejects. Safety, efficiency and long-term feasibility are crucial for successful CMM performance. Innovation, automation and readiness for the future drive productivity gains without compromising accuracy.

CDMX, State of Mexico Will Form Regional Automotive Cluster

Mexico City and the State of Mexico will establish a regional automotive cluster to capitalize on nearshoring. The alliance aims to expand the member base, enhance national presence and attract foreign investments. With 110 affiliated companies, the State of Mexico Regional Automotive Cluster contributes 12.6% to the state's GDP and generates 50,795 direct jobs. The cluster will focus on increasing automotive manufacturing centers and leveraging the specialized talent pool in Mexico City, collaborating with academia and promoting investment.

Photo by:   Mexico Business Publishing

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