Rane Madras LTD Invests $31 Million in a New Auto Parts Factory in Aguascalientes, Mexico

Rane Madras LTD, an Indian automotive parts company specializing in steering and suspension systems, has recently confirmed a $31 million investment to establish its first factory in Mexico. According to the company, their new plant will be in Aguascalientes, where conditions for security, logistics, and highly skilled labor are conducive to their operations.

With this investment, the automotive industry in Aguascalientes continues to expand. According to SiiLA, the vehicle and parts sector represents 66% of the industrial space in Aguascalientes. In addition to Rane Madras LTD, other major automotive companies like Nissan, Toyota, Xinquan, and ZF Group have chosen to set up and expand in this region in recent years.

Aguascalientes holds a strategic position for automotive, capital goods, and packaging companies due to its geographical location at the heart of Mexico and its access to crucial road and rail transport routes connecting domestic and international markets.

In 2023 alone, at least eight international companies, including Balluff, inaugurated or expanded their regional plants and logistics distribution centers, many of which related to the vehicle and parts sector. 68% of the area negotiated in these transactions, totaling over 78,000 square meters in Aguascalientes' industrial market, was occupied by companies that previously had no presence in the region.

This growth occurs in a context where the state government has reported that at least 54 new companies will seek to establish themselves in the region starting October 2023. Furthermore, according to data from the Mexican Economy Secretariat, Aguascalientes is on track to achieve a new record in foreign direct investment (FDI) this year. In the first six months of 2023, the state had attracted $1.24 billion in FDI, representing triple-digit growth compared to the same period in 2022 and the highest level to date.

Aguascalientes: A Stable Market with Moderate Growth

Aguascalientes' industrial real estate market boasts over 3.4 million square meters of built space. Over the past three years, the gross leasable area in this region has experienced a 9% growth. Although its growth has been moderate in recent years, this trend has accelerated. For instance, in 2023, the average quarterly delivery of new inventory was approximately 26,000 square meters. This figure surpasses the 2018 average of around 23,500 square meters per quarter.

Limited new inventory delivery, a high degree of tenant retention – reflected in positive net absorption levels since records began – and steady gross absorption has kept the availability rate below 2%.

SiiLA and the Mexican Economy Secretariat data indicate that Aguascalientes is a strategic location for investments and business expansion. Its consistent growth and attraction of FDI showcase the region's adaptability and resilience in the face of economic challenges.

With a highly skilled workforce and top-tier transportation infrastructure, Aguascalientes is ideally positioned to continue attracting investments and contribute to the sustainable growth of the Mexican economy. This region continues to demonstrate that at the heart of Mexico lies an economic engine showing no signs of slowing down.

For more information on this and other real estate markets in Mexico, explore SiiLA REsource or contact us at contacto@siila.com.mx.