The Mexican industry is strong, and currently investments are picking up again after the Covid hiatus, especially in the automotive sector. Clearly visible is the nearshoring trend: suppliers want to be closer to the USA and to their end customers, the automobile manufacturers. Almost all of the latter are already in the country, such as Volkswagen, Audi, BMW, Mercedes and the big Asian and American brands. Now the tier 1 and tier 2 suppliers are following.
Low labour costs, even compared to Asia, are also a good reason for doing business in Mexico. That’s why we see more and more Asian companies opening factories in Mexico. Samsung recently announced a US$500 million investment in a new home appliance factory in northern Mexico. They wouldn’t do that if production in Asia was cheaper. It pays out to produce in Mexico.
For the raw materials and energy sector, doing business is more difficult. For example, the oil industry is dominated by the state-owned company Pemex, which is supported by the government with all means, such as the awarding of concessions. Private companies are hardly able to compete with Pemex. In the energy sector, the situation is similar. Although private providers do exist here, especially in the field of renewable energies. But the government is doing all it can to increase the market share of the state-owned company CFE. In addition to that, the lithium deposits were nationalised in April, therefore the opportunities for mining companies have also decreased.