What Advantages Does Your State Provide to Potential Investors?Sat, 09/01/2018 - 12:58
As the automotive industry developed, clusters started forming in specific areas of the country that later had an impact on investment coming to the country. Although there is a national desire to attract more companies to the country, each state provides different advantages for its investors that clusters and other associations use as leverage to increase economic growth in the region. Collaboration or not, there is competition to attract the best companies to each state. To showcase these differences, Mexico Automotive Review asked cluster and association leaders to name the biggest advantages their state could offer and why should investors choose their region to invest.
Queretaro has evolved to offer more than just manufacturing operations thanks to engineering centers like GE’s or Continental’s and the network of public R&D centers that exists in the state. Queretaro can now offer design and engineering operations to the automotive industry. With over 50 years of automotive history, the state has created specific academic programs and a strong supplier base with around 200 Tier 2 companies that support the industry’s evolution. The state’s support industry also includes companies that automate production lines, produce tooling solutions and check fixtures. Moreover, several companies have chosen to establish their operations in Queretaro because of the calmness and security conditions that exist here, coupled with a solid infrastructure of industrial parks.
Our biggest advantage is our logistics infrastructure and the advantages it gives us in terms of connectivity. Having access to a state-of-the-art airport that can rival any project in the world will position not only the State of Mexico but the whole country as a model for logistics infrastructure and trade. Our human capital is equally important, together with our long-standing experience in helping companies survive their first years after establishing in the region. Overall, the relationship among the industry, the public sector and academia is what drives the state forward and continues to attract investment to the region. We are learning how we can best support technology development and become an innovation hub. The State of Mexico is the region with the highest concentration of R&D centers in the country, both public and privately funded.
Aguascalientes is in a good position as an investment destination but we still need more involvement from the state and Federal governments. There has been investment in industrial infrastructure and a customs agency that allows companies to do all their paperwork in the state and not at the border. We even have a consolidation center that gathers all materials that companies need and that they can use to avoid housing unnecessary stock at their premises. The state is also in a privileged position logistics-wise. We are located between the Lazaro Cardenas port and Veracruz and we also have access to the rail network. Having said that, it would be ideal to have one or two more points of access to ease transportation efforts. Our airport infrastructure is also limited and cargo planes must sometimes land in Guadalajara.
San Luis Potosi is in a very attractive development phase. Metaphorically speaking, San Luis Potosi is like a teenager that is just recognizing his potential. Mexico City and the metropolitan area are like a 60-year-old man that has reached maturity and is not looking for anything new. Puebla, Jalisco and Nuevo Leon represent a 30 or 35-year-old that still has drive and is planning to ensure a healthy retirement. San Luis Potosi has massive potential and many countries, such as Germany, Japan and Korea, are realizing the opportunities of investing there. Other states might already be consolidated clusters but in San Luis Potosi we are eager to be a key player in the industry.
One of our key advantages is our geographic location and what this offers in terms of logistics. We have access to both railways moving to the north of the country and to ports in both the Atlantic and the Pacific. However, talent is what really differentiates Guanajuato as an investment destination. We have a distinguished work culture and many people specialized in key activities for the industry. Security, although an issue in the entire country, has been controlled in the region as well, mainly because of the high talent demand the automotive industry has generated. We have also tried to strengthen the security standards within companies. We have worked with companies to identify weak spots and to offer training for security personnel.
Our objective is to become a supplier hub for all the OEMs established in the Bajio. This region is already becoming saturated and investing in an existing or new industrial park is becoming increasingly expensive. Meanwhile, Jalisco still offers accessible and competitive infrastructure. Service availability is also becoming an issue in the Bajio, mainly when it comes to water access. Jalisco still has a vast water supply, which is a must for some automotive processes. We do not depend solely on Honda to attract new suppliers. Many companies think we are late to the game but we still see many opportunities to support Jalisco’s automotive future.
Regions are more or less attractive to an investor depending on the kind of operations they will carry out and the level of labor sophistication they need. Certain processes need specialized talent that can be more easily found in Monterrey. The region’s appeal is not to be found in labor costs as much as in the capabilities of the workforce. Availability of universities and technical training schools producing engineers and technicians, industrial parks, a services-oriented infrastructure and a strong supplier base have also made Nuevo Leon a preferred automotive destination. There is also a far-reaching industry and a culture of industrial work at all levels that make Nuevo Leon attractive for companies to invest in sophisticated processes.
We know a company’s decision of where to invest has many variables and involves a certain amount of time to analyze the information on each region. However, we have realized that one of the biggest advantages for companies that choose Puebla and Tlaxcala as an investment destination is the availability of qualified labor, as well as low labor turnover rates when compared to other regions in the country. Both states also offer a stable business environment with a very low threat of strikes. Furthermore, this region is a natural cluster that surrounds many of the most important universities in the country with programs ideally suited for the automotive industry.