Maquila Portal - Weekly Bulletin

Mexico Manufacturing Industry Information Center.


Bulletin 794 - Friday, February 17, 2017

DICEX Wins National Export Prize 2016

Mexican firm DICEX received the highest award to foreign commerce in Mexico. This award is granted to different companies, institutions and organizations operating in Mexico which contribute to increase and diversify Mexican foreign sales of merchandise and services. With 28 years of experience in customs agencies and over 2 million of operations a year, DICEX is one of the main corporations of international commerce in Mexico; serving clients from the automotive, auto parts, electric - electronic, foods and groceries, aerospace and consumption goods industrial sectors. DICEX owns 23 customs offices in Mexico and 8 in the U.S., handling exports to over 120 countries.

Source: El Financiero

General Motors brings its electric vehicle to Mexico

General Motors (GM) announced the arrival of its electric vehicle, Bolt EV to Mexico. This model has driving autonomy for 383 kilometers, in addition to the new generation of the On Star connectivity system, which enables the use of Wi-Fi inside the car. Timothy Grewe, a Chevrolet engineer, said that the efficiency of this battery supports an 8 year or 1,000 miles warranty, although it could last much longer. Grewe explained that the services of the vehicle "are not much different from those of a regular vehicle. So the technicians are specialized in each one of the parts". The vehicle is expected to arrive to Mexico from the second half of the year onward.

Source: Cluster Industrial

Continental inaugurates its project for expansion in Ciudad Juarez

Continental Corporation inaugurated new headquarters of its expansion project, in Ciudad Juarez, with the objective of increasing the installed capacity, improving services, increasing client satisfaction and improving the overall functionality of the building. The Continental Juarez 1 factory is one of the global competence centers of this international provider of the Automotive Industry to produce Sensors and Actuators, within the Power train Division. Two new high-tech products will be launched over the next two years: BLDC Brushless DC Motor and MAF Mass Air Flow Sensors.

Source: Continental Corporation

FCA Mexico produced its engine number 3 million

The Pentastar V-6 engine number 3 million was assembled at FCA Mexico's Engine Plant South. This engine has replaced the legacy of 6 V-6 engine models that range from 2.7 liters to 4.0 liters, in the Fiat Chrysler Automobiles portfolio. Pentastar is among the most recent models of Dodge Durango, Chrysler Pacifica Hybrid, Dodge Grand Caravan, Dodge Challenger, Chrysler 300, Jeep Wrangler, Ram 1500, Dodge Journey, Ram Promaster, among others. It has been recognized 4 times by WardsAuto in its "10 Best Engines" list. This plant is the most flexible of the Group, as it is able to produce three models of its Pentastar engine.

Source: FCA

Slim brings the Chinese auto company JAC to Mexico

Carlos Slim is bringing JAC automotive corporation into Mexico. Giant Motors will start manufacturing vehicles from this Chinese firm at its new plant in Sahagun, Hidalgo. A US$220 million investment will go towards installing the new facilities. Elias Massri Sasson, General Director of Giant Motor, said that they are looking to produce 40,000 units annually, although it will only be 10,000 during its initial stage. This plant will generate 1,000 direct jobs and 4,500 indirect jobs. Massari affirmed that there will be announcements over the next months of new JAC agencies opening in Mexico, as well as presentations of the available models.

Source: El Financiero

Toyota: no regrets on Mexico sourcing plans

Toyota officials say they aren't having second thoughts about plans to build a new assembly plant in Mexico for Corolla small-car production, despite U.S. government threats of a 20% border tax on Mexican imports. The production strategy is aimed at improving logistics and gaining efficiency. Output of larger passenger vehicles such as the Camry, Highlander, Sienna and some Lexus models will be concentrated at Toyota's Midwest operations in Kentucky, Indiana, and Canada. Truck output will come from the plant in Texas and in Mexico, Toyota North America CEO Jim Lentz says. Toyota began moves to boost Tacoma pickup production in Mexico, with 60,000 units in added capacity expected to come online later this year.

Source: TECMA

Mexico to sign Free Trade Agreement with Turkey

Luis Videgaray Caso, head of the Ministry of Foreign Relations (SRE), informed that after seven rounds of dialogue with Turkey's Ministry of Foreign Affairs, Mevlüt Cavusoglu, Mexico will formalize a free trade agreement with this Country. The Mexican Chancellor pointed out that both Countries agreed to boost the bilateral negotiations to complete the commercial agreement. He affirms that "today more than ever, Mexico is open to world and wants to build and strengthen commercial and investment ties with all the countries it has befriended, regardless of the geographical distance".

Source: IDConline

Why is BMW not afraid of Trump?

The BMW investment was thought out to export ‘to the rest of the world', unlike other investment projects focused on supplying the U.S. market. If President Trump imposes a customs fee to vehicles imported from Mexico, BMW might export the cars produced in San Luis Potosi (SLP) to any of the other 44 countries that Mexico has commercial agreements with. 150,000 units of its 3 Series model will be assembled at the SLP plant from 2019 onward. This plant will be one of the five largest facilities of the firm outside of Germany, in addition to those in the U.S., U.K., China and South Africa.

Source: TECMA

U.S. to lose competitiveness if it stops getting supplies from Mexico

Joseph Stiglitz, a U.S. economist who was awarded the Nobel Prize in Economy in 2001, warned that the U.S. industry will loose competitiveness if it stops getting supplies from Mexico and other countries. "There will be no more job creation… without those imported low-cost pieces, vehicles manufactured in the U.S. will be more expensive", explained Stiglitz. "...The industrial jobs kept so, would be in direct competence with those in low-cost countries, which would collapse salaries", warned Stiglitz about the negative consequences of Trump's plan.


Source: Mundo Ejecutivo

Honda maintains operations in Guanajuato

Seiji Kuraishi Honda's executive Vice President, mentioned that the firm will re-assess its operations in Mexico after the U.S. threatened to charge imports with customs fees. Furthermore, John Mendel, Executive Sales Vice President for Honda North America, affirmed that the Celaya complex did not have any possibility to change its headquarters for operation. He expressed: "A great plant for us, from which exports are made into several markets. We do not have any plans to change our operation in Mexico". The Honda factory has been producing cars in Guanajuato lands since 2014.


Firms uphold plans of moving into Mexico

Manufacturing firms from the U.S. are maintaining their plans to relocate production lines into Mexico. Firms such as Rexnord, Caterpillar, Nucor, who manufactures steel products for construction, or the electronics components firm CTS, have not resigned their plans for transferring certain productive processes to Mexico. Todd Adams, Rexnord's General Director said that transferring part of their manufacturing operations to Mexico "is not something they might regret later". Nucor is planning to open a factory valued at US$270 million in Mexico. CTS Corp, informed that it will be moving the Indiana production in 2018, to places with "better costs" outside the U.S., and Mexico is listed among such places.

Source: El Economista

Asia exports accelerating

Mexico skyrocketed its product exports to Asia after Trump's victory, making this a primary indicator of where companies might aim to diversify foreign sales. Mexico increased its Asia exports by 36.8% during November, as it is the most dynamic destination of this indicator among the five continents. Asia is headed to become the second market of Mexican continental exports, after America and displacing Europe. During this month, inter annual rate of Mexican sales to Malaysia escalated 972%; sales to Thailand, went up by 130%; to Japan, 73%; to India, 46%, and to China, 43%, according to data from the Bank of Mexico.

Source: Portum

Agri-food exports to Japan grew 5.9%

Agri-food exports to Japan recorded growth rates of 5.99% during the third trimester of 2016, indicated the Mexican Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA). This percentage represents US$778 million. In addition, there was a US$769.7 million surplus balance in this period for Mexico from the U.S. The main product exported to Japan was pork meat; it represents over 34% of the total of the main agri-food products commercialized, followed by avocado, with 18%; tuna with 10%; bovine meet 5.7%; asparagus 3.8% and pumpkin 3.7%.

Source: NTR Guadalajara

Japanese investment project number 1,000 arriving in Mexico

JFE-Steel, provider of galvanized steel for the automotive sector, is the company number 1,000 with investment in Mexico, informed Ildefonso Guajardo Villarreal, Minister of Economy. According to the report, JFE-Steel is investing US$270 million on a factory which will be located in Silao, Guanajuato. The plant will have a capacity of production of 400,000 tons of galvanized steel plates for automotive production, and it will generate 300 jobs. Its construction will start next February, whereas production is scheduled for 2019.


Automotive sector could have a positive year

Despite confronting complicated times, companies from the automotive sector in Mexico might have a not-so-negative 2017. Signum Research indicated that, despite the current financial scenario, representatives of Mexican Stock Market (BMV) confirmed that investment projects which had already been scheduled, are going to continue their course, but companies might grow more cautious in the future. Bank Intercam announced that this sector might have the capacity to absorb new taxes, in case they were approved, which is why the volume will not be so affected. Analysts agree that the new and used vehicle industry might obtain positive results.

Source: El Economista