Weekly Review I April 24, 2024

GENERAL SITUATION IN MEXICO

RELEVANT NEWS

AUTO PARTS INDUSTRY ANNOUNCES ALLIANCE WITH GERMAN FIRM

In order to take advantage of the nearshoring boom, the Mexican Auto Parts Industry (INA) and its German counterpart Deutsche Messe AG will work on the creation of a new platform focused on strengthening the automotive supply chain in North America, applicable as of 2025.

Francisco Gonzalez Diaz, executive president of INA, stated that this agreement is established to take advantage of the trend of relocation of supply chains in the country or nearshoring, which provides opportunities to strengthen the national economy and generate employment in the country.

In addition to accessing new markets and technologies that benefit the auto parts and automotive industry.

The agreement also aims to promote the 2024 edition of the “Americas’ Mobility of the Future” (AMOF) platform as strategic allies.

This initiative is dedicated to fostering the development of the mobility of the future in Mexico.

INA, the main auto parts industry association in Mexico, representing more than 700 manufacturing plants in the country, will lead this effort together with IGECO Mexico and Deutsche Messe AG.

“This strategic alliance reflects our shared commitment to boost the growth and competitiveness of the automotive industry in Mexico and North America,” said Bernd Rohde, CEO of Italian German Exhibition Company Mexico.

Mexico’s auto parts industry is in a moment of unprecedented growth due to the increase in regional content that automotive parts and components must contain, as a result of the new USMCA rules, which has forced companies to relocate to the country.

However, the president of INA said that the race to attract companies from Asia is not easy and requires government incentives, in addition to promoting the advantages that the Mexican economy has for them to come to Mexico.

Gonzalez Diaz emphasized: “We are excited to collaborate with Deutsche Messe AG and IGECO Mexico in the creation of this new platform, which will strengthen the automotive supply chain in the region”.

For this year, the auto parts industry is expected to grow at least 3.5% compared to 2023, and to continue attracting investments of more than 8 billion dollars this year.

SOURCE: EL ECONOMISTA

KEYPOINTS OF PRESIDENT

ANDRES MANUEL

LOPEZ OBRADOR’S

MORNING PRESS CONFERENCE

April 17-24, 2024

LABOR

• Pension Fund for Well-being: The president reiterated that the reform to create a new Pension Fund for Well-being aims to rectify the damage caused by neoliberal policies. The fund will benefit workers, emphasizing that the measure does not involve expropriating their resources. Currently, unclaimed worker funds are held by AFORES, which are spreading false information about the reform. The Pension Fund will be overseen by the Bank of Mexico, utilizing resources currently managed by AFORES. Similar resistance was faced during a previous reform to reduce AFORES commissions. Additionally, the president agreed to a journalist’s suggestion to discuss the reform with key stakeholders, including Zoe Robledo, Luisa Maria Alcalde, and AFORES representatives.

LEGAL MATTERS

• Amnesty Law: The President pointed out that his goal is to help resolve the case of the disappearance of the young people from Ayotzinapa, in which some individuals may not provide information, hence the need for a tool that allows offering amnesty so that people provide information. He believes that his adversaries think he will misuse the law to act arbitrarily. However, this has never been

KEYPOINTS OF PRESIDENT

ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

done, and the purpose is to resolve pending issues such as the Ayotzinapa case.

• Reforms Approved in the Senate: Minister of the Interior, Luisa Alcalde, discussed Senate-approved reforms to the Amnesty and Amparo Laws, pending analysis in the Chamber of Deputies. The Amparo Law reform aims to restrain the excessive use of judicial power, preventing the general suspension of laws challenged in court, stated the minister.

• Tax debts of companies: President Lopez Obrador made a call to the Judiciary to resolve the issue of tax debts owed by the companies of Salinas Pliego.

INFRASTRUCTURE AND DEVELOPMENT

• Works in Tijuana: The president held a call with the director of various projects in Tijuana: a wastewater treatment plant, an elevated viaduct, and the Otay border crossing. Regarding the wastewater treatment plant, it was detailed that it will prevent seawater pollution, comply with NOM 001 standards, and allow water reuse; the project will be completed by September 30th. As for the elevated viaduct, changes are being made to the project due to the characteristics of the terrain to avoid affecting homes, but the project has already begun. Finally, the Otay border crossing is 67% complete, and the project will be finished in September.

NATURAL RESOURCE MANAGEMENT

• Drought and water scarcity: The president highlighted national efforts to tackle drought, emphasizing mapping areas with water scarcity where industrial concessions are restricted, prioritizing domestic use. He criticized past corrupt practices granting concessions disregarding scarcity and made a reference to

a past occurrence in Mexicali, where a factory used a lot of water for brewing beer.

INTERNATIONAL RELATIONS

• Assault on the Mexican embassy in Ecuador: The president requested that the International Court of Justice suspend Ecuador’s rights within the United Nations. This request stands until there is a public apology and a commitment to non-repetition from the Ecuadorian government. Additionally, he asked that the International Court of Justice pronounce that, if such a violation of a country’s sovereignty were to occur again, the full United Nations assembly could intervene.

• Meeting with NASA Director and Ambassador Ken Salazar: The president informed that he would meet with U.S. Ambassador Ken Salazar on the occasion of the visit by the Director of NASA, to discuss topics concerning airspace and technological cooperation.

• CELAC Meeting: President Lopez Obrador said that many countries supported Mexico following the assault on the embassy in Ecuador. Likewise, he mentioned that both Venezuela and Honduras called back their diplomatic personnel from Ecuador. Subsequently, the broadcast of the extraordinary session of the CELAC was played, where Mexico demanded Ecuador’s commitment to preventing the recurrence of such events and the definitive expulsion of Ecuador from the U.N.

BAJA CALIFORNIA

With an expected Foreign Direct Investment of 1.285 billion dollars, which will generate 2,964 jobs, Baja California ranks eighth among the 15 states that concentrate 76% of the investment announcements of private companies.

In terms of investment amount, Queretaro is in first place, with 5.783 billion dollars, which will generate 2,264 jobs, according to a report by the federal Ministry of Economy, released this Sunday, April 21, 2024.

SOURCE: ZETA TIJUANA

SONORA

Governor Alfonso Durazo Montaño signed a collaboration agreement with Jose Sanchez Perez, director of the Mexican Institute of Industrial Property (IMPI), to carry out joint actions to promote industrial property, aimed at disadvantaged groups, with a focus on the social and solidarity economy and support for micro, small and medium-sized companies.

Through this agreement, a commitment is made to promote the potential for innovation in the state to support entrepreneurs in registering their trademark or trade name.

SOURCE: EL IMPARCIAL

NUEVO LEON

During the period from 2019 to 2023, the entity that captured more manufacturing Foreign Direct Investment (FDI) continued to be Nuevo Leon by receiving a record of 13 billion 442 million dollars (mdd), reported the company Engen Capital in its economic study referring to the performance of FDI in the states of the country.

“The winner in manufacturing FDI continues to be Nuevo Leon, which received during 2019-2023 a total amount of $13.442 billion dollars, surpassing the $10.131 billion for Mexico City and far behind are EDOMEX and Jalisco, with more than $6 billion dollars, each,” Engen Capital indicated.

SOURCE: EL FINANCIERO

CHIHUAHUA

The Ministry of Innovation and Economic Development of Chihuahua, the William Davidson Institute (WDI) of the University of Michigan and the U.S. Embassy in Mexico presented the progress of the “Chihuahua-Michigan Academic Alliance for Zero Emission Vehicles”, during the meeting the projects that will promote the development of talent in electromobility were announced.

The “Chihuahua-Michigan Academic Alliance for Zero Emission Vehicles” is an initiative that aims to position the state as a national leader in this sector.

SOURCE: REPORTE INDIGO

COAHUILA

The industrial parks of Coahuila stand out as attractive destinations for the installation of new companies, while in other states of the northeast of the country the demand exceeds the availability of both industrial buildings and spaces for industry, said the president of Grupo Alianza, Cesar Cantu Garcia.

He added that the entire northeastern region of the country has experienced a positive economic growth derived from the “near shoring”; however, in the case of the Derramadero Alliance Industry Park, they began to prepare themselves 15 years ago in terms of infrastructure and services.

SOURCE:

EL SIGLO DE TORREON

JALISCO

In the framework of Hannover Messe, the most important industrial fair in the world that began on Monday in Germany, the Ministry of Economic Development (Sedeco) and the Association of Industrial Parks of the State of Jalisco (APIEJ), participate in the Mexico Pavilion in search of attracting investment to the state.

“Jalisco’s agenda includes meetings with executives from German companies such as Hella, Bosch and TH Automotive, to review investment projects for the state,” Sedeco said in a press release.

SOURCE: EL ECONOMISTA

SAN LUIS POTOSI

San Luis Potosi stands out in the production of auto parts in Mexico, ranking among the entities with the highest manufacturing volume at an annual rate.

In this regard, the INA pointed out that the latest report includes states that did not used to be a reference in the production of auto parts in Mexico, a positive consequence of nearshoring.

SOURCE: LIDER EMPRESARIAL

GUANAJUATO

The Guanajuato Brand Project has exceeded all expectations and more than six thousand companies have strengthened the local economic dynamics of the state, and it is estimated that 80% of these companies use local suppliers, said Froylan Salas Navarro, undersecretary for the development of MSMEs in Guanajuato.

He explained that the first distinctive was delivered on August 14, 2014, for 10 years has advanced in the vision of strengthening the local economy, most companies with this distinctive are the turn of handicrafts, manufacturing and services.

SOURCE: EL SOL DE IRAPUATO

QUERETARO

During his participation in the prestigious Hannover Messe Fair, the Municipal President of Queretaro, at the invitation of the State Governor, witnessed significant investment announcements that promise to strengthen the local economy. Representatives of the leading German company SCHUNK, led by its CEO, Kristina Schunk, and its CTO, Timo Gessman, revealed investment plans for more than 119 million 210 thousand pesos destined for Queretaro. SCHUNK’s CEO emphasized the importance of this investment not only in the generation of highly qualified jobs, but also in the collaboration with the rich ecosystem of talent that the region offers, including universities, academies and innovation centers. The Municipal President highlighted the collaboration between the State and Municipal Government to create an environment conducive to investment, guaranteeing security and legal certainty, fundamental to continue attracting quality jobs.

SOURCE: QUADRATIN

AGUASCALIENTES

by hosting one of the three aerospace innovation centers in Mexico. In this way, it strengthens its position as a leader in technological advances and the training of specialized talent in this sector.

In a joint effort to promote the development of the aerospace industry in Mexico, the Secretariat of Economic Development, Science and Technology of Aguascalientes (SEDECyT) has formed a strategic alliance with the Mexican Federation of the Aerospace Industry (FEMIA). This collaboration seeks to position the state of Aguascalientes as a competitive reference in the aerospace field at a national level.

SOURCE: LIDER EMPRESARIAL

CDMX

The festivities in Mexico City from January to April have spurred an economic impact of MXN 21.123 billion, benefiting 206,626 businesses, accounting for 40% of the city’s economic units. Minister of Economic Development from Mexico City, Fadlala Akabani Hneide, shared this data, highlighting that around 1,431,000 people work in sectors related to these events. The economic impact marks a 12% increase from 2023, showcasing Mexico City’s sustained economic growth. Last year, it exceeded the national average, contributing “a little over 4 percent” to its Gross Domestic Product.

SOURCE: EL ECONOMISTA

STATE OF MEXICO

Despite the complexity of election years, Foreign Direct Investment (FDI) in Mexico has remained steady in the early months of 2024, reaching an estimated USD $40 billion driven by nearshoring and business relocation. The State of Mexico currently captures 4-5% of this figure, aiming to double its share to 8-9% this year and 10-12% by 2025. Arnulfo Valdivia Machuca, president of Mexican Council for Foreign Trade (COMCE) in the State of Mexico, foresees intense activity this year, particularly around the Felipe Angeles International Airport, where logistics-related companies will relocate. There’s also a push for technological investment, signaling a transition from heavy industry to the tech sector with promising prospects. He stated that from COMCE, they have offered support to the Secretary of Economic Development, who has also provided her assistance, to begin supporting these technological investments.

SOURCE: MILENIO

INVESTMENT NEWS

NATIONAL BYD

The Chinese automotive company has set its sights on central Mexico for the installation of the new car plant it wants to place in the country. No investment or job details shared.

CDMX

KIRCHOFF

The German automotive company continues its expansion plans in Mexico and announced in a statement the development of its new plant in Puebla. No investment or job details shared.

CENTRAL MEXICO ZF

The automotive manufacturer announced an investment of 12.9 million dollars to expand its operations in Queretaro. No job details shared.

SOURCES: MEXICONOW, CLUSTER INDUSTRIAL

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