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  HOME | Mexico

Guanajuato Preparing to Increase Automobile Production

NOVI, Michigan – Guanajuato and the automobile parts factories located in that central Mexican state are preparing to increase their automobile production, which they predict will occur thanks to the new trade accord among Mexico, the United States and Canada.

Guanajuato’s foreign trade development coordinator, or Cofoce, along with the Guanajuato Automotive Cluster of companies (CAG) are currently participating in the Automotive Interiors Expo being held in the US city of Novi, Michigan, to promote the Mexican state’s automotive sector.

“Now, we have more certainty. I see it as an opportunity. In going from 62.5 to 75 percent regional content, now the assembly plants will have to look for more providers in Mexico. This is going to benefit the country,” Alan Orozco, the promotion coordinator for the automotive sector within Cofoce, told EFE.

Orozco referred to the changes set forth in the new North American trade treaty, known as the United States-Mexico-Canada Agreement (USMCA), which requires that up to 75 percent of the content of automobiles sold in the region must be produced in the three North American nations to avoid tariffs.

Given this opportunity, Cofoce is participating in international fairs such as the one in Novi to position Guanajuato in the new environment.

“One of the reasons we’re visiting this kind of fair, in Japan and in the US, is to get closer to the decision-makers. There are occasions when we approach these buyers in the factories in Mexico, but they inform us that the decisions have already been made, they come down from the corporate centers,” Orozco said.

“So, we’re participating in these fairs to get closer to the decision-makers and present to them all the reliable supply they can get in the state of Guanajuato. These companies can fulfill all their requirements (with us),” he added.

In recent years, Guanajuato has transformed itself into the heart of a dynamic Mexican automotive sector.

Currently, there are five assembly plants established in Guanajuato (General Motors, Mazda, Honda, Hino Motors and Toyota) that produce 10 models of automobiles and trucks.

The presence of the plants has created an automobile parts supply ecosystem that already includes 500 companies, an industrial fabric that – estimates are – will continue growing in the coming years as the production of automobiles in Guanajuato increases.

“It’s expected that by 2020 a million vehicles will be produced in the state. This is going to keep growing,” Orozco said.

Celay – one of the companies in the sector that is participating in the Novi fair in the GTO Automotive pavilion, the program created by Cofoce and CAG – also views the future with optimism.

Celay sales manager Julio Flores told EFE that the prospects for investment continue to grow.

“Starting in 2010, we began once again to increase sales and between 2012 and 2018 we practically doubled sales in the automotive sector. And right now, the national market continues to grow. The advantage we have is that many assembly plants are investing in Mexico,” he said.

Celay salesman Raul Escobar said that the new North American trade pact has calmed down the sector and “the outlook is good.”

 

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