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

Our reporting countries in the Americas south of the United States continue to offer opportunities for manufacturing technology sales. As investments pour into Mexico, the automotive, aerospace, and medical sectors continue to grow...
by Carlos Mortera
Feb 08, 2021

February 8, 2021

Our reporting countries in the Americas south of the United States continue to offer opportunities for manufacturing technology sales. As investments pour into Mexico, the automotive, aerospace, and medical sectors continue to grow. Domestic consumption in Brazil remains strong, and factory investments continue to keep up with demand. Argentina’s auto industry continues growing. Colombia’s oil & gas, Chile’s power generation, and Peru’s mining segments all expect significant investments in 2021. For more industry intel and other tidbits, read on. 

Mexico

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

  • Exports in Mexico are expected to grow between 15% and 20% during 2021, according to CEPAL (Economic Commission for Latin American and Caribbean Countries). 

  • FDI, affected by COVID-19, fell 42% worldwide, according to the Commerce and Development conference from the U.N., and a recovery is not expected until 2022. Mexico´s FDI fell only 8% and was the least-affected country in Latin America. 

  • According to the IMF, the Mexican economy is currently expected to grow 4.3% in 2021 compared to their previous analysis, which stated that the growth rate would be 3.5%. 

  • Dart Aerospace, one of the world’s leading manufacturers of flotation equipment and parts for aircraft, inaugurated its new plant in Chihuahua with an investment of $3.6 million. The manufacturing of aerospace components and equipment for airplanes and helicopters will be carried out in this facility. 

  • Baja California captured more than $3.3 billion of investments from 2019 to 2021. Here are some highlights of these investments: Motor Car Parts ($200 million); Outset Medical ($50 million); Prime Wheel Mexico ($70 million); Medline Industries ($50 million); Schneider Electric ($5.7 million); and Flextronics ($9 million). 

  • Mexico accounted for 70% of the exports of medical devices from Latin America and the Caribbean while also leading the imports of these products in the region with 32.8% of the total. 

  • The Economic Commission for Latin America and the Caribbean (ECLAC) reported that Mexico’s foreign sales of medical devices averaged $11.1 billion per year in the five-year period from 2014 to 2018, followed by those of Costa Rica ($3 billion) and the Dominican Republic ($1 billion). 

  • Volkswagen revamped operations to produce the new EA211 engine at its Silao plant in Guanajuato. $233 million was invested in this new production line. 

  • Light vehicle assembly in Mexico is expected to have a 12% growth in production, sales, and exports in 2021. The automotive association in Mexico (AMIA) estimates a total production of 3.4 million units in 2021. 

  • Kia is expected to move two production lines from China to its plant in Nuevo Leon, Mexico as a consequence of the nearshoring trend. The current production capacity of this plant is 400,000 units a year. 

  • Nissan began 2021 by announcing an investment of $27 million to renew the production of the 2021 Nissan Kicks and the 2021 Nissan March at its Aguascalientes A1 plant. 

  • In 2020, Mazda Mexico increased their production by 51%, totaling 138,855 units, and its exports increased 68%. 

Colombia

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

  • Oil & gas exploration is expecting $3 billion of investments in 2021, an increase of 51% compared to 2020. 

Peru

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

  • A total of seven mining projects will be launched in 2021. The largest project will be in Yanacocha Sulfuros, in Cajamarca, with an investment of $2.1 billion. 

Chile

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

  • There are more than 160 ongoing projects for power-generating plants and transmission infrastructure. The total investment exceeds $14 billion. 

Argentina

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

  • Volkswagen announced their plan to increase local component content for their vehicles produced in Argentina. This plan comes with an investment of $150 million to produce gearboxes for the new trucks and AO-SUV produced in their Cordoba plant. About 60% of the vehicles produced are exported. 

  • Ford announced an investment of $580 million to manufacture the new Ranger at their Pacheco plant in Argentina. The new Ranger is expected to be sold in 2023. 

Brazil

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

  • Brazilian Random Group keeps expanding through mergers and acquisitions. The group recently bought another foundry company located in São Paulo. Random Group is targeting capacity expansion of its production of agricultural equipment parts. 

  • Brazil’s machine tool and equipment sector grew 5% in 2020, driven mostly by domestic consumption. Abimaq expects the segment to grow by almost 7% in 2021. 

  • Brazilian Romi, the country’s largest machine tool builder, entered into an agreement with FANUC to represent their machines in South America. Robodrill machines will be sold and serviced by Romi’s team. 

  • Engie, Brazil’s largest energy company, will invest $500 million in a new plant for producing non-conventional energy. The power generators will be supplied by Siemens Gamesa. 

  • Thyssenkrupp announced it will produce large, machined parts to supply the non-conventional energy segment. Besides bearing and bushings, the company will supply parts to turbine manufacturers. 

  • WMW Brasil, a subsidiary of WMW Machinery Company Europe, is now fully operational and producing high-end heavy machine tools in its Varzea Paulista facility. 

  • As a result of Ford’s exit from Brazil, GM plans to invest over $2.5 billion to expand capacity of its facilities in São Caetano do Sul and São Jose dos Campos. 

  • Brazilian truck manufacturer FNM delivered its first electric truck order to the beverage company Ambev. 

  • Brazilian Mold, a local die & mold company, announced investments of around $20 million in new machinery for its facilities in Guarulhos. The group intends to expand production capacity for its automotive components. 

  • Czechich Tatra is now fully operational and ready to build mining trucks in Ponta Grossa. 

  • Brazil’s Industrial PMI dropped from 61.5 to 56.5 points in January 2021. 

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Author
Carlos Mortera
International Director, Latin America
Joined AMT in 2002, after an international tenure living and Brazil and travelling extensively thru South America. Carlos graduated from Monterrey In ...
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