Nearshoring and Exports Drive Automotive Expansion in Mexico: Over 330,000 sqm of Industrial Space Absorbed in 2024

In the first six months of 2024, the automotive and parts sector was one of Mexico's key drivers of industrial space absorption. Thanks to nearshoring investments aimed at exports, automotive production increased, accounting for 10% of the country's industrial growth. During this period, the sector occupied more than 330,000 square meters (sqm), reflecting a 1.4% growth. While this growth is lower than the first half of 2023 (2.4%) and 2022 (1.8%), it still surpasses pre-pandemic levels, where growth in 2020 and 2021 stood at 0.9% and 0.7%, respectively.

The sector's moderate performance in the first half of 2024 is not without its challenges. Despite its expansion, the sector is grappling with slowing global demand in a recessionary climate, supply chain adjustments, and rising raw material costs. These factors have tempered the growth pace seen in previous years, particularly for the heavy vehicle sector.

Despite the challenges, the sector has seen strategic investments from nearly 30 companies, out of about 700 registered by SiiLA. These companies have either established or expanded their production plants, with 38% dedicated to manufacturing metal-mechanical parts, 21% to interior components, and 17% to transport and cargo vehicles. The rest are focused on producing electronics, tires, plastic parts, and automotive systems, indicating a diverse and robust future for the sector.

Asian companies have primarily driven this dynamism: almost half (45%) of the automotive firms absorbing industrial space in Mexico come from Asia, particularly China and South Korea. U.S. and Canadian companies represent 28%, while European companies—mainly German—round out the mix.

Several companies have significantly contributed to the automotive sector's expansion. Leading the pack is Prince Manufacturing, which occupied over 25,500 sqm, followed closely by Sambo Motors Corporation, which added 25,000 sqm. Other notable contributors include Evercast, Matcor-Matsu Group, and MATA Automotive, each absorbing between 16,500 and 22,000 sqm. Kongsberg Automotive and CFMoto also stand out, with absorptions close to 15,600 sqm and 12,700 sqm, respectively. Rounding out the top 10 companies are Foton, Kwangjin, and Windsor Mold, each occupying between 8,700 and 11,200 sqm.