Mexico's industrial parks see increased demand driven by the auto parts sector

The auto parts sector has driven demand in Mexico's industrial parks thanks to record sales and manufacturing growth. May 2024 was a historic month for the country's automotive industry, with 119,985 new vehicles sold, the highest figure since 2017.

According to Cluster Industrial, these figures represent a 12.3% increase compared to May 2023, reflecting significant industry growth. This growth is one of the main factors driving the rising demand for industrial spaces.

Automotive Manufacturing Accelerates Demand for Mexican Industrial Sector Spaces

Not only have automobile manufacturing and sales increased, but the production of auto parts has also expanded, with numerous suppliers established in various regions of the country.

According to Francisco González, president of the National Auto Parts Industry (INA), this manufacturing sector is driven by the nearshoring trend.

The same organization reported that, during the third quarter of 2023, Mexico exported 43% of the automotive components imported by the United States, and it is expected to reach a 50% market share soon.

The increased activity could accelerate operations in Mexico's industrial parks, especially in some central production regions.

Evolution of the auto parts market in Mexico (values in billions of dollars)

Source: International Trade Administration, United States

The increase in activity could accelerate operations in Mexico's industrial parks, especially in some of the main production regions.

Main automotive production areas in Mexico

• Coahuila
• Chihuahua
• Nuevo Leon
• Guanajuato
• Queretaro
• Puebla
• Tamaulipas
• San Luis Potosi
• State of Mexico

Source of both graphs: CBRE

There are around 50 industrial parks under construction in northern Mexico and the Bajío region, according to Jorge Ávalos Carpinteyro, president of the Mexican Association of Private Industrial Parks (AMPIP).

Both regions have a high demand for space from the automotive industry. According to CBRE, net absorption in the Bajío during the first half of 2024 reached 371,000 m², 55% higher than the same period in 2023, mainly driven by the sector's activity in Guanajuato, Aguascalientes, Querétaro, and San Luis Potosí.

In northern Mexico, CBRE indicated that Monterrey stands out in occupancy related to the automotive industry, with 37% of the demand linked to this activity.

Threats to the growth of Mexican industrial parks

Although automotive manufacturing in Mexico continues to grow and benefits industrial parks, maintaining this pace presents challenges:

In the Bajio region, the Guanajuato Automotive Cluster faces energy availability issues despite its strong supply chain and focus on auto parts manufacturing.

According to El Economista, Jorge Ávalos, president of AMPIP, mentioned that an investment of approximately $45 million will be needed to supply production spaces and continue driving Mexico's industry forward.

At Frontier Industrial, we are committed to supporting Mexico's industry, so we are developing spaces such as the industrial park in Guanajuato, with Class A industrial buildings and top-tier infrastructure to ensure business operations continuity.

Contact our team for more information.