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Booming Manufacturing Sector in Mexico Benefits from High Tech Automotive Investments

14 May, 2013

The term “Made in Mexico” increasingly refers to automobiles and high-tech manufacturing instead of clothing and other related industries,as the nation moves toward exporting more complex machinery and products. New foreign investment,especially in the auto industry,is pouring into states northwest of Mexico City,such as Guanajuato,Aguascalientes and Queretaro,an area that is also home to a booming aerospace cluster.

“The new operations,drawn to the region by cheap wages and living costs,abundant land,good highways and incentives from local governments,are helping to transform an area once known as the nation’s breadbasket into a hive of factory activity,” writes Reuters. “Factories needing skilled workers have spawned specialized training centers.” 

Mexico has announced a goal of hitting six percent annual growth,making it crucial to boost productivity and add even more local content. To support this goal,the new government headed by President Enrique Peña Nieto has promised even deeper economic reforms,thereby furthering efforts that have already helped Mexico to win back a significant portion of the U.S. import market.

“We are having a real boom here now with the automotive industry,” Vanessa Cordero,commercial director of the Castro del Rio industrial park in Guanajuato,told Reuters.

German carmaker Volkswagen plans to produce 330,000 engines each year at its new $550 million plant,joining Nissan,Honda and Mazda from Japan,which are also building new manufacturing centers in central Mexico. The region is also home to a new Pirelli tire plant that makes tires intended mainly for the U.S. market. In addition,Canada’s Bombardier aerospace giant is currently building around 85 percent of the composite skeletons here that are needed for its Learjets.

“From a strategic point of view,Mexico is a very important operation,” stated Bombardier plant quality manager Norman Thompson according to Reuters.

Other notable advancements in the sector include a new Audi plant in Puebla,while Mexican-based suppliers such as Honeywell International,are also ramping up production thanks to growing demand. In addition,Japan’s Jatco and Germany’s Hella are setting up manufacturing centers,while North American Product Sharing has reportedly announced that it expects at least 200 more auto suppliers to flood the region within the next few years.

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