Mexico’s FDI attraction has taken a hit. According to data from the Ministry of Economy, the country attracted 15.2 percent less FDI in 1H19 compared to 1H18. INA highlighted the situation, saying that in 1Q19 a mere US$115 million were captured in FDI. With falling investment attraction, the sector needs to learn to pick itself up. Óscar Albin, Executive President of INA, suggests the development of a ProMéxico-like promotion agency through Mexico’s embassies abroad.
Queretaro remains the most attractive state in the Bajio region, largely as a result of profit reinvestments of foreign companies based there. While the Bajio-Center-West Alliance is projected to become one of the most competitive regions in Latin America, IMEF finds it will be difficult for this alliance to reach its growth projection of 5 percent.
In other news, growing sales of new Mitsubishi vehicles and used cars will boost the operations of NR Finance. Coahuila is the largest producer of auto parts in Mexico and the Hannover Messe fair is posed to give an important push to the Industry 4.0 revolution in Mexico.
Before digging into the news, do not forget to check our Interview of the Week featuring Alejandro Veraza, Managing Country Director of TI Fluid Systems and President of the Automotive Cluster of San Luis Potosi. How important is choosing the right location for the success of a manufacturing plant? Find out!
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Tough Week for FDI Attraction
Mexico’s FDI attraction fell 15.2 percent in 1H19 compared to the same period of 2018, according to the Ministry of Economy.
Mexico’s automotive industry attracted US$115 million in 1Q19, according to INA. A ProMéxico-like agency is the strategy that Mexico deserves, according to Albin, who says at this rhythm, the country will only attract US$500 million by the end of 2019.
Foreign companies based in Queretaro do not fear profit reinvestments, they welcome them. The state attracted the highest FDI in the Bajio region in 1Q19.
South Korean supplier Hanon Systems will invest MX$78 million (US$3.9 million) to expand its production center in Queretaro. The company manufactures solutions for thermal and energy management.
Battling Challenges, Manning Development
According to IMEF, it will be difficult for the Center-Bajio-West Alliance to reach the 5 percent growth goal it has. However, according to Gustavo de Hoyos of Coparmex, the region represented by this alliance has the potential to become one of the most competitive in Latin America.
Mexico buys more than what it sells to its CPTPP trade partners. The country’s purchases from its counterparts increased 2.7 percent in 1H19 compared to the 1.4 percent of increased sales.
Mexico’s production of trucks reached a record high in 1H19. 104,214 trucks were assembled in the country, which meant a 36.5 percent growth against 1H18’s figures.
Mexico exported automotive products worth US$68.47 billion in 1Q19, according to the Ministry of Economy. Mexico’s automotive exports accounted for 35.9 percent of the US’s imports in that sector.
A Little Push to the Sector
Mitsubishi will boost NR Finance in Mexico. Growing sales of new Mitsubishi vehicles and used cars will help Nissan’s financing branch battle contractions in the vehicle financing market.