GENERAL SITUATION IN MEXICO
Weekly Review I May 8, 2024
RELEVANT NEWS INDUSTRIES
MEDICAL DEVICES
The Mexican Association of Innovative Industries of Medical Devices (AMID), chaired by Héctor Orellana, has presented a decalogue of proposals aimed at boosting the medical device sector in Mexico. The proposal aims to increase patient access to innovative medical technologies, boost national research, and contribute to the country’s economic development. Mexico is the seventh largest exporter of medical devices worldwide and the first in Latin America, with an annual growth of 6.2% and an export market value of $11.271 billion. The sector serves 75 medical specialties and generates 160,000 jobs in 240 production plants, of which 40 are highly innovative.
The proposed measures include increasing the health budget to at least 6% of GDP, strengthening disease prevention and diagnosis, encouraging innovation adoption, digitizing the health system, promoting research and development of health innovation, and capitalizing on the medical device sector’s opportunity to contribute to the country’s economic and social development. The electoral climate will also play a role in shaping the association’s direction and composition.
SOURCE: REPORTE INDIGO
SEMICONDUCTORS
A delegation of Taiwanese firms, led by TEEMA, is visiting Mexico to explore opportunities in the electric vehicle market. The mission includes discussions with key Mexican figures like the Secretary of Economy and the President of the Mexican Business Coordinating Council. Mexico’s strategic location and industrial policies make it an attractive destination for investments in sectors like EVs and semiconductors. The agenda includes meetings with chambers of commerce and economic development secretaries to discuss potential collaborations. Bilateral trade between Taiwan and Mexico has grown significantly, with nearshoring becoming a prominent strategy amidst global supply chain disruptions. Citibanamex is also promoting Mexico as a nearshoring destination in Asia. This visit could lead to increased cooperation and investment between the two countries, showcasing a model of successful international collaboration for economic growth and innovation.
SOURCE: LATIN AMERICAN POST
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RELEVANT NEWS INDUSTRIES
AUTOMOTIVE
Mexico has experienced a record volume of production and export of light vehicles in April 2024, with a double-digit percentage growth, confirming the automotive industry’s boom path. The National Institute of Geography and Statistics (Inegi) reported that automotive companies produced 358,575 light vehicles, with over 70% being SUVs and pick-ups. In April, production increased by 21.74% year-on-year, representing an additional 64,025 units. New models from various brands, such as General Motors and Honda, have contributed to the growth. Kia’s K3 production has already exceeded 2023 production, and Hyundai Tucson production has begun. The Mexican Association of the Automobile Industry (AMIA) highlighted the strong April 2024, with 358,575 units produced, representing a 21.7% growth compared to the same month of 2023. The capacity utilization of the production plant was 89.2%, the best result since the pandemic. The manufacturing of electric cars contributed to increasing automotive production, with 25,701 units of the Mach-e and Blazer electric models manufactured from January to April.
Exports of light vehicles to the world remain dynamic, with 289,756 units shipped to the world in the first quarter of 2024, representing a 14.38% increase compared to April 2023. Mexico has positioned itself as the main foreign supplier of the United States, with 18 units coming from Mexico for every 100 units sold.
SOURCE: EL ECONOMISTA
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RELEVANT NEWS
BUSINESS CHAMBERS
MEXICALI EDC:
Mexicali EDC met with eminent businesses in Salt Lake City this week to launch its Business Agenda in Utah. They were cordially received at their premises, where they talked about upcoming initiatives and the advantages of investing in the region.
Mexicali EDC expressed its gratitude to the Mexican Consulate in Salt Lake City for hosting them at their facilities, as well as to significant industry and commerce organizations in Utah like the World Trade Center Utah (WTC Utah), the Utah Advanced Materials Manufacturing Initiative (UAMMI), and 47G for enabling them to showcase Mexicali’s global reach and industrial competitiveness.
SOURCE: MEXICALI EDC
TIJUANA EDC:
This week, at Tijuana EDC’s monthly promotion meeting, they reviewed the outcomes of their April promotion efforts. They emphasized the significant impact of their participation in three distinct events—Design 2 Part, XPONENTIAL, and DMEMS—which facilitated contact with over 300 prospects. Looking ahead, their next destination is the BIO Convention in San Diego, California, from June 3rd to 6th.
SOURCE: TIJUANA EDC
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RELEVANT NEWS
BUSINESS CHAMBERS
CLAUGTO
The Guanajuato Automotive Cluster (CLAUGTO) and the Coordinator for the Promotion of Trade (COFOCE) have signed a collaboration agreement to establish a collaborative intelligence unit for data analysis. The unit aims to identify opportunities to strengthen the automotive chain in the region. The agreement benefits all parties involved in the automotive industry and aims to support companies in analyzing exports and imports, particularly in relation to tariff fractions. The Canadian Embassy in Mexico, Fernando Baños, attended the meeting and highlighted Querétaro’s high Foreign Direct Investment from Canada, particularly in the automotive and aerospace industries. The embassy has established excellent relationships with state authorities, thanking companies for their support in establishing themselves in the state. As of February 2024, Querétaro has 112 Canadian-capital companies, mainly engaged in plastics and automotive parts manufacturing.
SOURCE: MEXICO INDUSTRY
Through the “Challenges 2024-2030” document, INDEX suggests measures to the three candidates running for Jalisco government in order to capitalize on nearshoring and sustain the state’s growth and economic development. Guillermo del Río, president of INDEX Occidente, commented that the document outlines five strategic points that the industry needs to make the most of the opportunities offered by nearshoring and continue to generate growth and development in the entity. It also contains the challenges and opportunities that this industry has at the state and federal levels.
SOURCE: EL ECONOMISTA
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INDEX JALISCO
NEWS BY STATE
SONORA
Nogales is positioned to potentially establish an industrial park to host investments., informed Jesús Gámez García, state president of the National Council of the Maquiladora and Export Manufacturing Industry (Index). The initiative aims to address the growing need for spaces to facilitate new investments in the region. Gámez García highlights the significance of Mayor Juan Gim’s efforts in promoting firm projects for the construction of warehouses and the development of a new industrial park in Nogales, signaling positive momentum towards fostering economic growth and job creation. This prospective industrial park aligns with Sonora’s strategy to enhance competitiveness and attract investments that contribute to economic development.
SOURCE: RADIO SONORA
BAJA CALIFORNIA
Baja California sees a surge in investments, particularly from Korean investors committing $265 million, according to Governor Marina del Pilar Avila Olmeda. This substantial investment not only signals confidence in the state’s economic potential but also promises to generate more productive jobs, enhancing the lives of local families. The allocation of these funds will extend to universities like UABC, Cetys Universidad, and UTT, underscoring a commitment to empowering youth for a prosperous future.
Kurt Ignacio Honold Morales, Secretary of Economy and Innovation, highlights extensive engagement with prominent companies like Toyota, Foxconn, and Samsung Electronics, culminating in confirmed investment projects totaling over $500 million by 2025. Collaboration agreements between these companies and local universities and research centers reinforce efforts to foster knowledge exchange and innovation. Additionally, a program to certify a hundred teachers in semiconductor technology aims to bolster educational capacity and industry alignment, facilitated through partnerships with Arizona State University and local semiconductor firms.
SOURCE: EL UNIVERSAL
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NEWS BY STATE
COAHUILA
Governor Manolo Jiménez Salinas has announced that a tour of Asia has resulted in over 15 billion pesos of investment (845 million dollars) and the creation of six companies in Coahuila. The six companies, which will arrive in the state, will be engaged in various industries such as molding and injection of plastic for automotive, aerospace, and household appliances, manufacturing lamination parts, metal and stamped spare parts, recycling lithium batteries, manufacturing bearings, rolls, and automobile components, and the lantern company ZC RUBBER. Two of these companies will be located in La Laguna, one in the Carbonífera region, and three in the Southeast.
SOURCE: MEXICO INDUSTRY
NUEVO LEON
Nuevo León is at the forefront of job creation at the national level.
According to the latest IMSS report, between January and April 2024, Nuevo León added a total of 50,235 newly created jobs. This means that, for the fourth month in a row, the state hasined its position as the leading employment generator in Mexico.
The above is visible and has been reflected in the exponential demand of companies in relation to the creation of new vacancies, which, in turn, indicates that the state has sufficient prepared human capital.
SOURCE: INFORMADOR MX
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NEWS BY STATE
SAN LUIS POTOSI
BMW Group Planta San Luis Potosí started the construction of the Battery Module Production Centre, as well as the expansion of the body area and the assembly and logistics areas within its complex located in the Logistik II industrial park in de Villa de Reyes. Milan Nedeljković, Member of the Board of BMW Group AG responsible for production, said: “The production of high voltage batteries in San Luis Potosí will be part of our global production network for the new sixth generation of e-drive. For that we are building five sites on three continents.”
SOURCE: MEXICO INDUSTRY
GUANAJUATO
USAID Mexico has presented regulatory challenges to Guanajuato’s authorities, associations, and companies to facilitate the attraction and retention of investments. The challenges are part of a co-creation strategy implemented by USAID pro-integrity, involving public and private sector actors to eliminate barriers that hinder or inhibit investments. The State Council for Regulatory Improvement of Guanajuato aims to facilitate and simplify procedures and regulations that promote the competitiveness of municipalities and their economic activities. The council intends to provide support to companies interested in detailed analysis of exports and imports, specifically in relation to tariff fractions. The Canadian Embassy in Mexico, Fernando Baños, highlighted Querétaro’s high Foreign Direct Investment from Canada, particularly in the automotive and aerospace industries. As of February 2024, the state has 112 Canadian-capital companies, representing 2.6% of the national total and 6.2% of the total number of companies in Queretaro, mainly engaged in plastics and automotive parts manufacturing.
SOURCE: MEXICO INDUSTRY
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NEWS BY STATE
JALISCO
Jalisco made investments of about $100 million (mdd) from German automobile companies during its recent participation in the Hannover Messe, said the head of the Secretariat for Economic Development (Sedeco), Roberto Arechederra. While reserving the names of the investing companies for confidentiality issues, the state official explained that it is a new company and two expansion projects that are already operating in Jalisco, and together, could generate between 300 and 500 jobs in a first phase and, subsequently, reach 1,000 or 1,500 jobs.
SOURCE: EL ECONOMISTA
QUERETARO
A Canadian trade delegation visited Querétaro, Mexico, to learn about the state’s economic capabilities and strengthen ties with Canadian businesses. The meeting was attended by representatives from the Province of Ontario, the Bajío Chapter of the Canadian Chamber of Commerce, the Secretary of Sustainable Development, and the directors of Industrial Promotion and Business Development. The Canadian Embassy in Mexico highlighted Querétaro’s high Foreign Direct Investment in the automotive and aerospace industries, which began with Bombardier.
SOURCE: EL ECONOMISTA
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NEWS BY STATE
CDMX
Clara Brugada, candidate for the Head of Government by the coalition “Sigamos Haciendo Historia,” presented ten proposals to strengthen the economic development of Mexico City before members of the Mexican Bankers Association. She emphasized the promotion of new growth engines, including financial services, electromobility, and creative and digital industries. Brugada also pledged to continue building an investment-friendly city, with shared prosperity, formal job creation, sound public finances, transparency, and zero corruption. Additionally, she announced plans to implement a metropolitan economic plan in collaboration with the federal and State of Mexico governments to leverage nearshoring opportunities and support the use of new technologies for financial inclusion.
SOURCE: EXCELSIOR
STATE OF MEXICO
The construction industry is a key sector in Mexico’s economy, often driving production nationwide. It contributed about 6.8% to Mexico’s GDP in 2021. However, in 2020, the industry faced a significant downturn of around 23% due to the Covid-19 pandemic. The State of Mexico plays a notable role, with approximately 1,226 construction companies and 12.3 thousand jobs by March 2023. Despite contributing 7.5% to formal employment in the construction sector, the state experienced a 53.7% decline in 2022 due to federal spending cuts. Nonetheless, there’s hope for recovery in 2024, as early indicators show a 5.8% increase in production for the first five months of 2023, suggesting a positive trend for the industry’s future.
SOURCE: MEGANOTICIAS
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INVESTMENT NEWS
CENTRAL MEXICO
FORVIA
The automotive manufacturer announces the groundbreaking for a new facility in Apaseo el Grande, Guanajuato. No investment and jobs details shared.
NIDEC PRESS
The autoparts company announces the expansion of a new molding machine line, investing 20 million dollars in Querétaro. This will create 40 jobs.
NORTH
RUBBER
The Chinese tires manufacturer announces the arri-
val of its operations in Mexico, investing 590 million dollars in Saltillo, Coahuila. No jobs details shared.
KONGSBERG AUTOMOTIVE
The Swiss automotive manufacturer announces the expansion of a new facility in Ramos Arizpe, Coahuila. No investment and jobs details shared.
SINBON ELECTRONICS
The Taiwanese electronics manufacturer announces an investment of 100 million dollars for a new production facility in Villa de Reyes, San Luis Potosí. The project aims to create 700 jobs.
SOURCES: MEXICONOW, CLUSTER INDUSTRIAL
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LEGISLATIVE CHANGES AND INITIATIVES
LABOR
• Drafted By The Government Of Sinaloa: Report With Agreement To Be Presented Before The Chamber Of Deputies Of The Congress Of The Union, Initiative With A Draft Decree To Reform Various Provisions Of The Federal Labor Law And The Federal Law Of Employees Of The State, Regulatory Of Section B) Of Article 123 Of The Constitution
Presented by: Committee on Labor Affairs and Social Security
Purpose: Employers are obligated to grant women and menstruating workers diagnosed with primary or secondary dysmenorrhea to an incapacitating degree, permission to be absent from their workplace for one to three days each month, upon presentation of a medical certificate accrediting it, with full salary payment.
Employers are prohibited from dismissing a worker or directly or indirectly coercing them to resign due to presenting primary or secondary dysmenorrhea to an incapacitating degree.
Status: 2024-05-07 - Approved, passed to the Chamber of Deputies of the Government of Sinaloa.
• Subsidy on jobs that earn less than MXN 9,000: President López Obrador announced a decree increasing employment subsidies for workers earning up to MXN 9,081 monthly to alleviate Income Tax burdens. This measure was taken so workers could fully receive the 20% increase in minimum wage, as they were only getting 14% because 6% went to ISR (income tax). The decree, benefiting 9 million formal workers, was published in the Official Gazette of the Federation and entered into force on May 1st.
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LEGISLATIVE CHANGES AND INITIATIVES
• Initiative With A Draft Decree Amending Articles 84 And 85 And Adding Article 995-Bis To The Federal Labor Law
Presented by: Deputy Emmanuel Reyes Carmona (Gto - MORENA)
Purpose: The proposed initiative aims to ensure that workers’ salaries in companies benefiting markets outside the national territory are comparable to those paid in the company’s country of origin. This international comparative wage shall not be less than 80% of the average wage paid for equivalent work in the country of origin. To determine this international comparative salary, reliable labor studies and statistics from national and international sources will be considered. The Ministry of Labor, in coordination with other authorities, will establish mechanisms for verifying and adjusting these salaries. Non-compliance with salary payments will result in penalties, including suspension of fiscal benefits and fines. Recurring or serious violations may lead to permanent exclusion from certain industry programs. The Ministry of Labor will oversee the evaluation of non-compliance through audits and reviews, with the authority to cancel employer registrations if necessary.
Status: 2024-04-29 - Published in the Parliamentary Gazette of the Chamber of Deputies.
• Initiative With Draft Decree To Add Subsection Xxvii Ter To Article 132 Of The Federal Labor Law And To Amend And Add Subsections X And Xi Of Article 72 Of The General Education Law
Presented by: Deputy Janeth Yareli Sánchez Cruz (Plur - MORENA)
Purpose: It establishes as an obligation of the employer to grant menstrual leave for up to two working days per month with full pay to women or menstruating individuals diagnosed with severe endometriosis or primary or secondary incapacitating dysmenorrhea, for which a medical certificate issued by a public health institution endorsing such conditions must be presented. It adds, as part of the educational process of students, the right to recognize absences due to menstruation, justifying the absences and providing facilities so as not to affect the academic development of female students or menstruating individuals who cannot attend classes.
Status: 2024-04-29 - Published in the Parliamentary Gazette of the Chamber of Deputies.
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LEGISLATIVE CHANGES AND INITIATIVES
CLIMATE CHANGE
• San Luis Potosí: Citizen Initiative Amending Article 15 Of The State Climate Change Law
Presented by: State Congress of San Luis Potosí Purpose: It will be the responsibility of the State Climate Change System to ensure that companies generating greenhouse gas emissions, whether medium or large, must guarantee a minimum annual reduction of 5% in their greenhouse gas emissions.
This reduction should not affect their productivity or sales quantity, with the purpose of achieving zero greenhouse gas emissions within 20 years.
Any company wishing to operate within the State must have a plan for sustainable production and plans and actions to become a green company and comply with the minimum annual reduction of 5%.
Investments made to comply with this standard will be tax-deductible in the same year they are made.
Status: 2024-05-02 - Initiative referred to Commission on Ecology and Environment of the Congress of San Luis Potosí for opinion.
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