The Bajio region continues to attract automotive investments. Only last week, German suppliers Kamax and Waldaschaff Automotive started operations in Guanajuato and Canadian supplier Martinrea opened a new manufacturing plant in Queretaro to produce high-precision tooling equipment. Germany has consolidated its position as the fourth largest investor in Guanajuato with a special focus on the local automotive industry.

It was a tough week for OEMs in Mexico. Audi and Volkswagen had to close their operations on Thursday as a consequence of road blockages by protestors in Puebla. Additionally, GM will lay off 260 of the 7,000 workers of its San Luis Potosi plant as a consequence of projected demand reductions in its main exports markets.

Audi Q5 by Audi AG. CC BY-NC-ND 2.0

In terms of domestic sales, economic and political uncertainty coupled with the new government’s austerity policies and high interest rates have enticed Toyota to reduce its sales projection for Mexico.  Vehicle financing reached its lowest level in the last four years and new emissions regulations for trucks have caused truck and bus sales to drop in July, also impacted Toyota’s decision.

Despite these challenging conditions, the automotive industry of Jalisco expects to continue growing moderately despite contractions in the country’s vehicle production. Additionally, Mexico’s car exports increased 9.5 percent in July, the arrival of Toyota to Guanajuato has spurred demand for qualified human resources in Queretaro and Daimler Buses has a new CEO: Alexandre Augusto Noguera.

Rev your engine. This is the week in automotive!

The Bajio Region’s Automotive Drive

German supplier Waldaschaff Automotive started operations in Guanajuato to support the operations of BMW. The company will invest US$20 million in its plant in the next five years.

The German supplier of high precision, safety components Kamax invested US$45 million to open a new plant in Guanajuato, the company’s first operating facility in Mexico.

Germany has consolidated as one of the main investors in Guanajuato, particularly in the automotive industry.

With an initial investment of US$8.1 million dollars, Agility Tooling, a division of Martinrea, opened a new plant in Queretaro.

Bittersweet Week for Mexico’s Automakers

Volkswagen and Audi suspended operations during the second shift of its Puebla assembly plants due to road blockages.

GM will lay off 260 workers from its San Luis Potosi factory due to variations in the demand projections of exports markets.

Vehicle financing contracted 8.4 percent in 1H19 and reached its lowest level in the last four years, according to Jato Dynamics.

Toyota reduced its sales projection for the Mexican market by 10,000 units due to political and economic uncertainty, more expensive vehicle financing and austerity policies of the federal government.

Wholesale sales of new trucks and buses fell 50 percent in July due to technology changes required to meet the new norm on emissions.

Big Opportunities and New Leaders

E04 Av. La Florida · Metro Franklin by Zona E del Transantiago CC BY-NC-ND 2.0

The automotive industry of Jalisco expects more opportunities in 2020. Despite the contraction in vehicle production that occurred in July, the Mexican auto parts sector projects a moderate growth.

In July, Mexico’s car exports increased 9.5 percent. In that month, 270,904 light vehicles were exported.

Alexandre Augusto Nogueira will be the new CEO of Daimler Buses México. After five years of leading the OEM in Mexico, Jan Hegner will step down.

The installation of a new Toyota assembly plant in Guanajuato has spurred demand for specialized workers in Queretaro.

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

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