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

The news from our neighbors in Latin and South America remains positive. Automakers GM, VW, and Toyota continue to make substantial investments in Brazil while Stihl gears up to meet the increased demand for power equipment. Mexico will have its first ...
Jun 28, 2021

The news from our neighbors in Latin and South America remains positive. Automakers GM, VW, and Toyota continue to make substantial investments in Brazil while Stihl gears up to meet the increased demand for power equipment. Mexico will have its first lithium battery plant, and GM is investing heavily in the local production of electric vehicles. Colombia and Argentina receive Chinese investments in the medical and EV battery spaces. For more industry intel and other tidbits, read on.

Mexico

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

  • Sumitomo Drive Technologies is investing $50 million for the construction of its fourth plant in Mexico and the second in Nuevo León, where it will produce speed reducers for various industries (automotive, mining, food, and others). Construction of the 150,000-square-foot facility is expected to be completed by the first quarter of 2022.

  • Fluid Routing Solutions (FRS), a subsidiary of Cleveland-based Park Ohio, is investing $16 million to build its third plant in Ciudad Acuña, creating 500 new jobs. The new plant will be dedicated to manufacturing fluid routing solutions for customers including Nissan, Ford, GM, and Stellantis. The company is a leader in the transport and routing of fluids, fuels, and gases.

  • F&P MFG, the Japan-based auto parts supplier, will expand its F-Tech subsidiary plant in Irapuato with an investment of $16 million. The plant supplies components for automotive chassis, suspension, brakes, and clutches. $10 million of the investment will be for expansion construction, and $6 million will be for the purchase of new production equipment. Completion is planned for August 2022.

  • General Motors announced it will invest $1 billion to build a new plant and transform existing facilities at its Ramos Arizpe complex to produce electric vehicles by 2023. This marks the first major investment for an electric vehicle factory in Mexico and will become GM’s fifth North American site to produce EVs.

  • Mexico now ranks in the top 10 countries with the highest foreign direct investment (FDI). Globally, FDI flows fell by 35% during the pandemic, yet it only fell by 14% in Mexico. That investment redirection, which continues today, moved Mexico from 14th place to 9th place in the 2020 standings.

  • The state of Chihuahua is expecting investments of $1.5 billion in 2021 and to repeat that performance in 2022 and 2023. This will position Chihuahua in the top three states that attract the most investment. The key sectors for investment are aerospace, automotive (oriented to electromobility), electromechanical (microchips and materials related to Industry 4.0 technology), and biotechnology (medical supplies).

Brazil

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

  • Great Wall Motors, China’s largest manufacturer of SUVs and pickups, announced plans to produce passenger cars in Brazil by acquiring Daimler’s plant in Iracemapolis and Ford’s plant located in Camaçari. A new manufacturing facility to produce EVs is also part of the investment plan. Investment numbers have not yet been released.

  • Norwegian-based Equinor, in partnership with ExxonMobil, Petrogal Brasil, and PPSA, will invest $8 billion in São Paulo state to explore oil and gas reserves in the offshore pre-salt Bacalhau field. Plans are to kick-off production in 2024 at 220,000 barrels per day.

  • MAN Latin America, Brazil’s commercial vehicle producer, launched its production of e-trucks to be largely used in beverage distribution. Ambev has purchased the first 1,000 units produced and expects to grow its e-truck fleet to 1,600 by 2023.

  • MWM-Caterpillar has doubled its local production capacity of power generators and expects to expand further. The company recorded a 210% growth in sales over the last six months.

  • Embraer delivered its first E195-E2 e-jet to Zurich-based Helvetic Airways. The other three jets purchased will leave their São José dos Campos plant by the end of July.

  • Truck production grew 6% in May, and the segment recorded its best result in seven years. OEMs have produced over 60,100 units so far in 2021, a 106% increase YOY.

  • ABINFER, the Brazilian job shops association, reported 82% capacity utilization in the first half of 2021. Auto parts represented a large amount of the demand. ABINFER expects the Brazilian market to grow by 25% in 2021.

Colombia

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

  • In March, from the latest data reported, the industrial production index in Colombia increased 9% YOY. Manufacturing had the largest YOY increase at 21%.

  • Colombia is expected to have GDP growth of 7.6% in 2021, according to France’s Organisation for Economic Co-operation and Development (OECD).

Uruguay

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

  • In 2020, FDI in Urugay grew 43% to the highest level since 2012. The country had one of the lowest COVID-19 infection rates in the region and has embraced new industrial technology.

Peru

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

  • Industrial production in Peru is expected to grow 11% this year and then 4% for the next two years. This is above the expected average in the region.

Panama

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

  • A new consortium led by the government and U.S.-based InterEnergy Group and AES Corp. announced an investment of $1 billion to build a new natural gas processing plant dubbed Gatun.

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Author
Carlos Mortera
International Director, Latin America
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