Covering the Industry's Economic, Legal & Financial Issues

MexicanAutomotive covers the Mexican automotive and auto parts industries, and is published monthly in English and Spanish. MexicanAutomotive reports on general Mexican automotive industry topics, as well as economic, financial and legal issues affecting the North American automotive industry. Published by Cacheaux, Cavazos & Newton (CCN), subscriptions to MexicanAutomotive are free. CCN is an international law firm with offices in Texas and Mexico. The firm provides legal services in many practice areas including Automotive law to clients doing business in the NAFTA region.

MexicanAutomotive.com | English
Guinness Record Broken in Mexico City E-mail

On October 5, 2014 attendees set a Guinness record for the largest number of classic automobiles in one event. A parade of more than 1,200 classic autos, which were subject to certain requirements and to previously register their participation, joined a caravan that circled the Paseo de la Reforma in Mexico City, all before 200,000 spectators. The parade showed yet again the interest and enthusiasm Mexicans have for automobiles.

 
International Motorcycle Show in Mexico E-mail

The modern business zone near Mexico City, Santa Fe, recently hosted the Salon Internacional de La Motocicleta (International Motorcycle Show) with a wide range of exhibitors that attracted the attention of thousands of interested capital city residents and motorcycle fanatics. All of the major motorcycle brands presented their products at the show, as well as an array of motorcycles and accessories to be used for both recreational and sport transportation. The more recognizable brands such as Harley Davidson and Indian, which have a long history in Mexico (Pancho Villa posed sitting on an Indian for the U.S. press), BMW, Royal Enfield, Husqvarna, Yamaha, as well as Bimota, BRP, KTM, showed their respective vehicle lineups for 2015 at attractive exhibit stands. Legendary brand Harley Davidson showed its electric motorcycle for the first time outside of the United States. Harley announced that during the first quarter of 2015 it will release its model Street 750 in Mexico, a new urban model. The Italian motorcycle maker Ducati, which also has a long tradition in Mexico, as it was highly popular during the 1950s, announced that it will also release a new model in Mexico called the “Scrambler”, which will be available in 2015. Mexico will be the first country in Latin America to receive this model.

 
Hyundai Increases its Investment in Guerrero E-mail

 

It is not all bad news for the state of Guerrero, which has suffered problems from the 2013 hurricanes and storms, as well as numerous instances of violence from organized crime. The Korean company Hyundai announced plans to invest 300 million pesos to expand its bus manufacturing plant located in the city of Ocotito, Guerrero, which is located on the main highway halfway between Chilpancingo and the port of Acapulco. Hyundai, which produces units designed for public service in the Federal District, Quintana Roo, Jalisco and Nuevo Leon, has contemplated exporting such units to other Latin American countries owing to high demand for this product. The company recently won a bid from the state of Guerrero to deliver 72 buses, which will be a key part of the new public transportation system that Acapulco has needed for so long.

 
Mexico Welcomes Kia Investment E-mail

 

Mexican President Enrique Peña Nieto stated, “Today is a good moment to invest in Mexico”. The Mexican President who has been known for implementing transformative reforms, six of the eleven of which are economic in nature, which will lead to growth and higher productivity in the domestic economy. President Peña Nieto recognized the economic significance of the investment of one billion dollars by Kia to construct a new automotive manufacturing plant in the northern state of Nuevo Leon. This investment, said the president, will generate thousands of well-paying jobs and at least $1.5 billion of additional economic impact, and is an example of the interest global companies such as Kia have shown in investing Mexico. The plant will begin operations in 2016.

 
Toyota: Expansion Plans in Mexico E-mail

 

The giant in global financial information, Bloomberg, recently published an item covering the continued expansion of Mexico’s automotive industry. Toyota, which at present does not have an entire final assembly plant in Mexico, is searching in the country for possible sites to build such a plant. In September, executives of the Japanese company met with Mexican officials to initiate discussions on this topic. The low cost of labor and large number of trade agreements entered into by Mexico has led the automotive manufacturer to view Mexico as a good location for investment. Toyota, which is the largest manufacturer in the world, finds itself following a number of other companies. Since June 2014, Kia Motors Corporation, Bayerische Motoren Werke AG (BMW) and a joint venture of Daimler AG and Nissan Motor Corporation have announced their intention to build manufacturing facilities, with investments in the one billion dollar range for each plant. Toyota already has a small foothold in the Mexican market with Mazda Motor Corporation, whose plant in Guanajuato produced its first automobile in January and is planning to produce 50,000 Toyotas per year. Toyota also has a small plant in Tijuana, which in reality serves as an assembler of the Tacoma model, the company’s small pick-up truck.

According to Bloomberg, all manufacturers interested in the North American market are intent on expanding their capacity there, and Mexico without doubt is a strong candidate to provide such capacity. Michael Robinet, managing director and advisor at IHS Automotive in Southfield, Michigan stated, “Mexico is now the crossroads of the automotive trade in the Western hemisphere.” Toyota spokesperson Tania Saldaña stated that the company is evaluating potential investments in Mexico. If this occurs, total investment would reach on the order of ten billion dollars, as announced by President Enrique Peña Nieto when he took office in December of 2012. For 2014, investments will reach 3.2 billion dollars. The director of the Mexican Automotive Industry Association (AMIA), Fausto Cuevas, stated in September that “Mexico has proven to be an excellent automobile, auto parts and automotive components manufacturer.”

For the time being, Toyota’s operations in Mexico are not yet comparable to those of Kia, which last month announced plans to build a one billion dollar factory that would produce 300,000 autos per year, or the commitment of Daimler-Nissan announced in June to jointly construct a plant costing one billion euros ($1.29 billion) in order to produce 300,000 compact units under the Infinity and Mercedes Benz brands. All of such investments will, according to Bloomberg, vault Mexico past Brazil as the top auto producer in Latin America by the end of the Year.

 
Mexico’s Automotive Industry on the Rise. E-mail

The good news continues for the Mexican automotive industry. Mexico has become the fourth largest exporter of vehicles in the world and the eighth largest total producer. From 1999 to 2013, Mexico’s automotive industry, which is fundamentally comprised of automotive vehicle producers and vehicle assemblers, represented 8.4% of Foreign Direct Investment (FDI) in Mexico. Over the last fifteen years, the automotive industry has been the most important generator of FDI in the manufacturing sector, responsible for 18% of FDI in such sector.

 
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