Partnerships between OEMs to develop innovative technologies have become the new normal. A few days after Ford and Volkswagen announced their project to collaborate in Argo AI, both OEMs committed to increase their collaboration to develop technologies for electric, self-driving vehicles. Additionally, both Renault and Toyota partnered with Chinese OEMs to enter the world’s largest EV market. Renault will work with Jiangling Motors and Toyota with BYD to develop and market new EVs.

In Mexico, Queretaro maintains positive growth despite the challenges that the Mexican economy faces. According to the Automotive Cluster of Queretaro, the state’s auto parts industry aims to diversify its target markets and will hire between 2,500 and 3,000 new workers in 2019. The local Ministry of Economic Development highlighted that Queretaro continues to attract FDI and will keep positive growth expectations. The Bajio region and Northern Mexico account for around 80 percent of the country’s auto part production. Additionally, the Center-Bajio-West Alliance (ACBO) plans to open trade promotion offices in China and carry out a trade mission there.

In other news, Nemak will close its Canada factory following the early discontinuation of a production project for a Chinese client, which will leave the factory largely idle. Additionally, sales of new vehicles on credit dropped 9.7 percent, according to AMDA, and salaries in the Mexican electronics and automotive industry have lost dynamism despite the overall growth that the sector has experienced.

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Partnerships for the Future

Photo by stanvpetersen. CC0

Ford and Volkswagen will strengthen their focus to develop electric, self-driving vehicles and boosting the Argo AI division.

Renault has partnered with Jiangling Motors to enter the Chinese EV market. The French OEM plans to increase its share in the venture to 50 percent.

Toyota and BYD have partnered to develop new electric vehicles. The main focus of this partnership is the development of SUVs and sedans to be sold under the Toyota brand in China.

Nissan will renew 60 percent of its lineup to keep its sales leadership in Mexico. The OEM plans to add several innovations to its vehicles and launch new models in the next two years.

Automotive Momentum in the Bajio

Sterling Heights Assembly Plant by FIAT Chryslers Automobiles. CC BY-NC-ND 2.0

Queretaro’s automotive sector looks for alternative markets. The diversification strategy of the local auto parts industry will have an effect in the medium term, according to the local automotive cluster.

The Bajio region and Northern Mexico concentrate 80 percent of the country’s auto parts production, according to INA.

Queretaro’s automotive industry will hire more staff. The Automotive Cluster of Queretaro projects that between 2,500 and 3,000 new workers will be hired.

The state maintains high growth expectations. According to Marco del Prete of SEDESU, the state continues to attract investment projects despite the economic challenges that the country faces.

The Center-Bajio-West Alliance will open trade promotion offices in China and organize a trade mission to that country.

Challenges and Opportunities Ahead

Nemak will close its factory in Canada in 2020. The company highlighted that the anticipated cease of an exports program for a client in China will leave this plant operating at less than 10 percent of its capacity.

Sales of new vehicles on credit dropped 9.7 percent in the first five months of 2019, according to AMDA.

Trade between Mexico and the US will continue growing during the Trump era, according to consulting company Plante Moran.

Salaries in the Mexican automotive industry grow at its highest rhythm in over two years. But in May, Mexico’s electronics and automotive industry registered a loss of dynamism in labor indicators.

Ride-sharing apps such as Uber, Didi and Cabify will have to pay a 1.5 percent tax in Nuevo Leon.

Don’t forget to follow us on twitter at @mexautomotive and @mexautomotriz for the latest industry news.

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