3/12/2024
The manufacturing industry stands out as the main factor attracting foreign investments up to September 2024, driven by the nearshoring trend in Mexico.
According to the Secretariat of Economy, the Foreign Direct Investment (FDI) received by the country between January and September totals $64,703 million. Of that amount, manufacturing industry activities account for 56%, with five industries concentrating the inflow of resources.
Which companies are doing nearshoring to Mexico?
As the Ministry of Economy indicates, of the total resources received by the Mexican industry, manufacturing activities account for more than 50% of the total.
The five industries identified as the main recipients of resources, according to the government agency, are:
- Beverages: 42%
- Automobiles: 18%
- Auto parts: 13%
- Iron and steel: 9%
- Aerospace equipment: 2%
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How is Mexican nearshoring progressing?
Amid an upward trend in the automotive industry and home appliance production in recent years, the Secretariat of Economy also noted a redistribution of regions receiving investments from foreign companies, with 15 states accounting for 75% of the total resources received.
The states attracting the most investment are:
- Querétaro: 11% of foreign investment.
- Nuevo León: 11% of received investment.
- Veracruz: 10% of attracted investments.
- State of Mexico: 10% of resource attraction.
Regarding the origin of the investments, the United States remains the main investor in Mexico's industrial sector, followed by Germany as the second most important investor, according to the Center for Public Finance Studies.
- United States: 44.11%
- Germany: 13.40%
- Japan: 9.91%
- Canada: 7.74%
- Other countries: 24.84%
Why are companies doing nearshoring to Mexico?
The primary reasons are proximity to consumer markets and lower production costs. However, other factors also play a role:
- Skilled labor availability.
- A wide variety of trade agreements with different countries.
- Time zone alignment with the U.S. market.
- Lower logistical operation costs.
Manufacturing industry activities include automotive sector production, which is growing thanks to the availability of auto parts manufacturers in Mexico and the presence of assembly plants from various countries.
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In this context, the supply chain in Mexico enables assembly companies to address the U.S. market under favorable conditions thanks to the Free Trade Agreement that includes the United States and Canada. Simultaneously, the electromobility trend drives the country's importance in the global automotive sector.
Amid the nearshoring trend to Mexico and the establishment of foreign companies in the country, Frontier Industrial offers industrial land for sale and industrial warehouses for lease in the main regions of Mexican industry.
If your company is looking for the most suitable location to establish operations in Mexico, do not hesitate to contact us and learn about our portfolio of industrial parks.
