Auto-parts production growth and the arrival of new investments is anticipated

The automotive sector in Queretaro has a supply chain integrated by more than 226 companies’ producers of auto-parts, with more than 65 thousand formal Jobs and with a Cluster constituted by 77 partners.  In addition, it has the accompaniment of more than 53 research centers and has the first Automotive University in Mexico.

In the most recent study fulfilled by the Mexican Institute for Competitiveness (IMCO, by its Spanish initials) Queretaro positions as the second most competitive State in the country, highlighting the innovation subindex, where it located in second place.

According to figures published by the Government of Queretaro in 2012 to September 2018, was registered a flux for the subsector of auto-parts of more than 327 million dollars, consolidating as the subsector that has the highest reception of foreign direct investment in the State.

Daniel Hernandez, general director of the Automotive Cluster of Queretaro, said that the market has shown an important growth regarding auto-parts.

“Last year we closed with a production of about 87 thousand million dollars in auto-parts nationwide, a considerable growth compared with 2017, where the production was almost of 81 thousand 500 million dollars, this means the market grew,” he noted.

Queretaro is a State mainly dedicated to the manufacturing of auto-parts, “we represent about 7 % of the national production of auto-parts; in the Bajio, this belongs to the 27 % and we contribute with 7 % of that total,” emphasized Daniel Hernandez.

Companies invest about 3 million pesos in 2018

The evolution of the State, since the linkage, translates in a highly qualified human resource and in certainty for investors, what has thrown favorable results for the economy of the State.

Data provided by the Ministry of Sustainable Development in the State of Queretaro, indicate that only in 2018 were settled 32 investment projects in the automotive sector, as first place, followed by Biotechnology and Aerospace Industry.

Thus, companies such as Continental addressed an investment of 50 million euros for the development of a Center for Innovation; Mann + Hummel, with 300 million pesos in the construction of a plant; Hirschvogel Components Mexico, with a capital of one billion pesos; and AGCO Mexico, with an investment of 10 million pesos.

In addition, the investment of Grupo Safran was consolidated in the aerospace sector, Mars of food and Vesta within the industrial real estate sector, which added almost three million pesos in the entity.

“What we could observe throughout the year were, mainly, expansion processes, the opening of new lines in companies to face contracts and commitments, we saw a very dynamic sector,” said the general director of the Automotive Cluster Queretaro.

He added that Queretaro comes from a local production of about 5 thousand 300 million dollars in previous years and together with last year it closed in about 6 thousand 120 million dollars in auto-parts production.

New Engineering Centers bring innovation to the industry

Queretaro has a wide offer of Innovation and Engineering Centers focused on strengthening different sectors and generate synergies among the own industry.

Through the Program of Stimuli to Innovation (PEI, by its Spanish initials) with an amount of 70.5 million pesos, 21 research and technological development projects were benefited; also, 35 workshops were held focused on foreign trade subjects, information technologies, administration, sales and intellectual property, same that had 504 attendees.

Very interest things for Queretaro were settled regarding investments in engineering centers; “we saw the opening of the Continental Center which is the highest reference we can have in engineering in the automotive sector,” said Daniel Hernandez.

In addition, companies such as Yanfeng also launched their Engineering Center, joining those already existing such as the one from Valeo, Grupo CARSO together with Delphi and of Tremec and Harman, which also settled another investment in engineering.

The importance of the automotive sector in Mexico

In addition of contributing with 3 % of the national Gross Domestic Product (GDP,) and 18 % of the manufacturing GDP, the automotive sector is the main generator of currency in the country, with a surplus trade balance 0f 71 thousand million dollars in 2017, this according to the results from the most recent study done by the National Institute of Statistics and Geography (INEGI, by Spanish initials) together with the Mexican Association of the Automotive Industry (AMIA, by its Spanish initials.)

The study underlined that Mexico is the seventh manufacturer of vehicles worldwide and the first in Latin America; likely, he detailed that we are number four among the light vehicles exporters’ countries and fifth in auto-parts in the world.

It is important to mention that Mexico is the main supplier of auto-parts of the American market; one of every three dollars exported from the manufacturing sector belongs to automotive products.

Production and sales, record levels in 2019

According to figures published by INEGI, during November 2018, the sale of hybrid and electric vehicles was of 1,768 units, 93.2 % above what was register on the penultimate month last year.

Sales of hybrid and electric vehicles were integrated by 16 electric, 113 connectable hybrid and 1,639 hybrid; regarding the accumulate January – November 2018, 15,694 vehicles were commercialized with these kind of technologies.

During January 2019, 111,212 vehicles were sold, 1.8 % more than on the first month 2018; while the production of light vehicles during the first month was of 333 thousand 677 units, record level for one month of January, 9.9 % more than the same month 2018.

Likewise, he said that in January 2019, 242 thousand 299 light vehicles were exported, 4.9 % above what was registered in January 2018; only in the United States, were trade one million 127 thousand 288 new light vehicles during January 2019, 2.1 % less that the registered in the same month in 2018.

In such context, Queretaro generated a 2.7 % of the total sales of hybrid and electric vehicles from January to November 2018.

Expectations for the automotive sector

The Ministry of Sustainable Development of the State of Queretaro said that 2018 closed with 30 investment projects in portfolio, same that if settled will represent an investment higher than five thousand 600 million pesos and more than 13 thousand potential Jobs, the investments are part of the automotive, aerospace and information technologies activities.

About this, Daniel Hernandez, general director of the Automotive Cluster Queretaro, detailed that for 2019, much activity is anticipated from companies of China, Thailand and Vietnam, where part of the supply chain for Japanese assemblers to Mexico is being developed, this due to that they are seeking for business opportunities that will allow them help their Tier 1 customers, mainly of the regional content value rule.