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International News From the Field: Mexico, Brazil, and Latin America

Mexico, Brazil, and Latin America are adapting to the new normal ahead of schedule. The manufacturing industry is rebounding across the region with numerous new investments and sales opportunities. Pivots in supply chain strategies, a focus...
Sep 11, 2020

Mexico, Brazil, and Latin America are adapting to the new normal ahead of schedule. The manufacturing industry is rebounding across the region with numerous new investments and sales opportunities. Pivots in supply chain strategies, a focus on supporting local production, and new infrastructure projects have created opportunities in the automotive, truck, off-road, and construction equipment sectors. For details and other tidbits, read on.

Mexico

For more information, contact Carlos Mortera (cmortera@AMTonline.org)

  • Danfoss announced an expansion to their condenser manufacturing facility in Monterrey.

  • Shacman, a Chinese truck manufacturer, announced plans for a new plant in the state of Hidalgo. They are projecting to manufacture 5,000 units in the first five years.

  • Black and Decker announced the opening of a new facility in Monterrey with an investment of $40 million.

  • Four companies announced big investment plans within the automotive supply chain.

  1. Motorcar Parts of America Inc. of California will invest $9 million to expand operations, creating 300 new jobs.

  2. The Stant Corp., an Indiana-based automotive technology company, will open a new factory in Guanajuato with an investment of $15 million and will create 500 new jobs.

  3. Prime Wheel Corp. announced it will be investing $70 million in its auto-wheel production facilities in Tijuana, creating an additional 1,500-2,000 jobs.

  4. Kyungshin Cable, a wire harnesses company serving the automotive industry, will invest $65 million in two factories, creating 2,300 jobs.

  • According to the National Institute of Statistics and Geography (INEGI), in July, exports increased 9.81% and imports increased 3.19%. This is two consecutive months showing an increase in both these indicators.

  • Several infrastructure projects are planned that are bound to trigger economic growth.

  1. A project to build a new, 200-mile rail line that will connect both oceans from Oaxaca to Veracruz.

  2. A new international airport in Mexico City.

  3. A new refinery in Dos Bocas Veracruz.

  4. A new cargo and tourism rail line in the Yucatan peninsula.

Brazil

For more information, contact Achilles Arbex (aarbex@AMTonline.org)

  • VW Trucks is investing $100 million in upgrades to adjust their production to more closely align with Industry 4.0. VW recently launched its new platform Meteor for the heavy truck market presently dominated by Volvo, Scania, and Mercedes. Over 70 robots were added to the production floor and automatically guided vehicles (AGVs) have been implemented in their Rio de Janeiro facilities.

  • The capital goods segment increased 15% in July YOY while the average for industry in general was an 8% increase. This is the third month of growth driven by the automotive sector (44% increase) and machine tools (14% increase).

  • Local industry has supply chain concerns regarding the low volume of raw material available domestically. As a result, Usiminas, a local steel company, opened its second blast furnace to supply the demand of the automotive market. This is a major development in terms of local production of iron and steel in Brazil. 

  • The high volume of sales for off-road/off-highway equipment continues to surprise the OEMs. Primary goods production for 2020 in this sector is expected to be around 247 million tons, which would set a record. OEMs like CNH and John Deere have been averaging a 10% increase in sales YOY. 

  • Embraer announced a massive layoff of 2,500 jobs as a direct consequence of the aviation crisis sparked by the coronavirus pandemic and the failure of their pending merger with Boeing.

  • The Central Bank published another improvement in GDP growth projection for 2020 from -5.46% to -5.28%.

  • British JCB is expanding its portfolio of products manufactured in its Sorocaba facilities. The OEM announced a $25 million investment to produce excavators and other equipment that will serve not only the domestic market but will also be exported. 

  • Volvo Construction Equipment keeps doing well due to exports. In September, 50 heavy mining trucks will be delivered to countries like Germany, France, Norway, and Israel. They export approximately 50% of the products they produce in Brazil.

  • Motorcycle production was 98,000 units in July, a 25% increase over June and better than July 2019.

  • Companies continue to receive incentives from the government through the Rota 2030 program. Job shops have been benefitting from the program since early 2020, and a focus of the program is to move companies to invest in digitization.

Peru

For more information, contact Carlos Mortera (cmortera@AMTonline.org)

  • The mining industry is projected to receive major FDI during the next 5 years. This will trigger the creation of many job shops to support the investment.

Argentina

For more information, contact Carlos Mortera (cmortera@AMTonline.org)

  • KTM, a motorcycle manufacturer, announced plans for a new factory.

  • Rotoplas, a key manufacturer of water management tanks and systems, announced the revamping of their facility in San Martin and Loma Hermosa.

Colombia

For more information, contact Carlos Mortera (cmortera@AMTonline.org)

  • As of July, the PMI for this Latin American country is the highest in the region at 58%. They also have the highest projection for GDP growth in 2021 in the region, surpassing regional giants like Brazil and Mexico.

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Author
Edward Christopher
Vice President, Global Services
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