Reports on some recent and upcoming investment collected from the local business media:
- Aviation: Mexican airline VivaAerobus will invest US$30 million this year to acquire eight Boeing 737-300 aircraft. The principally domestic carrier will use the new planes to add domestic and possibly international routes as well. VivaAerobus has expanded steadily since entering the market in 2006.
- Automotive: U.S. automaker General Motors announced plans to invest US$540 million to expand production at its existing plant at Toluca, just west of Mexico City. The added infrastructure will accommodate production of two new models of energy efficient engines. GM is Mexico’s largest auto maker.
- Energy: Spanish renewable energy developer Iberdrola plans to invest US$400 million in its Mexico operations through the end of 2012. Iberdrola recently purchased an existing wind farm in southern Mexico from fellow Spanish energy firm Gamesa, and is currently building another wind farm in the same region.
- Logistics: Hutchison Port Holdings will undertake US$200 million worth of expansion and upgrades at the Port of Lazaro Cardenas on Mexico’s Pacific coast this year. Planned works include dock construction, addition of berths and expansion of switching and storage yards to handle cargo containers.
- Aviation: Mexican domestic air carrier Interjet announced plans to invest over US$90 million over the coming two years. The resources are earmarked for tripling the capacity of the airline’s maintenance center and acquiring a substantial number of new aircraft. Interjet reportedly will become the first Latin American airline to use Sukhoi jets, of Ruso-European manufacture, on its scheduled routes.
- Automotive: U.S. automaker General Motors will invest US$300 million to upgrade and adapt its manufacturing plant in the northeastern state of San Luís Potosí. Expansion of the plant is intended to accommodate production of a new compact model not currently being built in Mexico.
- Manufacturing: U.S.-based furniture manufacturer Furniture Brands is investing US$20 million to outfit an existing maquiladora plant in the southeastern state of Yucatan to produce cut-and-sew kits for its U.S. upholstery operations. The facility is expected to initiate production in mid-2011. Read the rest of this entry »
While many industries are struggling in the current down economy, aerospace continues to post robust results in Mexico. Aerospace manufacturing and support services in the country have grown from a relatively minor industry in the 1990s to become one of the world’s leaders by 2010. Particularly in recent years, as the momentum of clusters grew, the industry has exploded from about 60 companies in 2004 to over 200 currently. Export sales are projected at US$3.4 billion for 2009, and are expected to exceed US$4 billion in 2010.
Mexico has taken a drubbing from China over the past decade in the attraction of foreign investment in manufacturing, maquiladora and otherwise. While Mexico has by no means been abandoned by North American and Asian manufacturers, China became a veritable Klondike for foreign manufactures seeking to lower production costs in the early 2000’s. But a recent story in Reforma reinforces our own anecdotal evidence that Mexico may be in the process of recovering some of the FDI that drank the China Kool-Aid over the past few years.
As 2009 draws to a close, Mexico, like many countries, will be happy to see the back of this year. Not only did 2009 see the worst economic decline in decades, but the steep recession was exacerbated by the outbreak of the H1N1 flu in April, which had a devastating effect on tourism and, to a lesser degree, business travel. Mexico’s deep economic integration with the United States is a key motor for the economy, and as a result, the contraction of demand for vehicles and other durable goods in the U.S.A. hit Mexico’s productive sector hard. The first two quarters of the year were practically catastrophic, as the precipitous dropoff in demand for vehicles led to layoffs and temporary plant closings in Mexico’s large vehicle manufacturing industry. Tourism, hit by the one-two punch of the slumping U.S. economy and then the flu outbreak in April, is showing tepid signs of recovery, but the sector is still expected to close the year approximately 20% below 2008 levels.
