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

There’s lots of good news from Latin and South America this week, including automotive developments in Mexico, projected growth in the truck and bus market in Brazil, Chile’s projected growth, FDI in Colombia, and Argentina’s supply chain localization.
by Carlos Mortera
Mar 08, 2021

There’s lots of good news from Latin and South America this week, including automotive developments in Mexico, projected growth in the truck and bus market in Brazil, Chile’s projected growth, FDI in Colombia, and Argentina’s supply chain localization. For specifics and other industry intel, read on.

Mexico

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

  • Volkswagen’s facility in Silao, Guanajuato, started manufacturing the EA211 engine for the new Taos SUV. Investment for the new line was $233 million.

  • Continental, one of the world's largest auto parts suppliers, will invest nearly $72 million to expand one of its plants in San Luis Potosí, where it produces components for light vehicle braking systems.

  • BTL, a Chinese company specializing in vehicle security systems, will begin manufacturing in Valle de Derramadero, Saltillo, Coahuila, with an investment of $48 million.

  • Mexican exports in the aerospace industry are expected to decrease 25% to 45% YOY when comparing 2020 to 2019. The total exports from the aerospace industry in 2020 are expected to be reported between $5 billion and $7 billion. For next year, exports are expected to recover and grow between 6% and 10%.

  • The state of Querétaro secured 27 new projects which represent $550 million of investment in different industries, such as automotive, IT, aerospace, appliances, and food & beverage.

  • Ashcroft invested $11 million to construct a new facility in Querétaro, where pressure and temperature measurement tools will be manufactured.

Brazil

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

  • Mercedes-Benz is investing $160 million to increase capacity and upgrade technologies of its gearbox, engine, and axle production lines; the upgrades are projected to be concluded before 2022. The company has invested more than $350 million since 2018 in new technologies for its cabin and extra-heavy truck component manufacturing lines. Mercedes-Benz has also been pushing facilities toward Industry 4.0 specifications, especially their bus manufacturing lines.

  • Volvo hired 400 more people to support increased production in their Curitiba facilities. The company expects the truck and bus market to grow 40% in 2021. Volvo is strong throughout South America, especially Argentina, Chile, and Peru, which represent 15% of the company’s business.

  • Following Volvo, Scania also has very high expectations for 2021. The company will invest more than $500 million in anticipation of the demand for trucks to be used in agriculture and sanitation projects.

  • Brazil’s machine tool sector recorded its best January since 2015 and was 38% higher than January 2020. Domestic consumption increased 50% YOY.

  • Toyota expects 25% growth in 2021. Investments in 2021 will be around $300 million. Plans are to expand production capacity in its Sorocaba site.

  • Stellantis announced a new platform to be produced in Brazil. The model will be based on an existing SUV platform, while investment amounts have not yet been released.

  • The Brazilian Confederation of Industries survey shows that 82% of all big companies operating in Brazil have plans to invest in 2021 to expand capacity and improve processes through technology.

  • The agriculture machinery sector grew almost 18% in 2020. The devaluation of the real helped boost exports, which was a key factor in this growth.

  • Stellantis also announced expansion plans for its engine manufacturing plant. Plans are to expand capacity by 60% to achieve over 500,000 units in 2021. The facility also produces around 1,700 gearboxes a day and will additionally begin manufacturing turbo systems in 2021. Investment amounts have yet to be released.

  • On the railway front, Alston will invest in expanding its Taubaté facilities to accommodate POs awarded to set up railway systems in São Paulo, Brazil; Buenos Aires, Argentina; and Santiago, Chile.

Chile

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

  • Steel production in Latin America was widely varied in 2020. Chile was the country with the best performance in extraction with 1.2 million tons and an increase of 2.1%. At the other extreme was Peru with a decrease of 40.6% and 732 thousand tons.

  • The International Monetary Fund (IMF) raised its GDP growth projection for Chile from 4.5% to 5.8% in 2021.

  • According to the Milken Institute’s Global Opportunity Index 2021, Chile is the Latin American country with the greatest potential to attract FDI. Latin America performs well in two key areas: a diverse and highly skilled workforce and the breadth and depth of financial systems.

Colombia

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

  • Colombian auto sales are estimated to increase 17% when compared to what was achieved in 2020.

  • Kimberly-Clark announced an investment of $80 million to strengthen its production capacity in its three plants, Cauca, Cundinamarca, and Antioquia

  • In 2020, Cali and Valle de Cauca received over 16 projects of FDI, which were estimated to generate 1,800 new jobs and a total investment of over $205 million. In 2021, it is expected to receive 20 more new projects with a total investment of $120 million.

  • PepsiCo announced an investment of $158 million to strengthen their value chain in four different areas: innovation and infrastructure, agriculture, communities, and sustainability. $93 million is being used for the Guarne, Antioquia plant, which started construction in August 2020 and is expected to open in 2022.

Argentina

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

  • Honda will invest $5 million in its Campana plant to increase the number of locally produced parts and also begin production of the GLH150 motorcycle. This amount is added to the $15 million that the company allocated in the last two years to its production lines and localization of parts.

  • From July 2020 to January 2021, Argentina received over $7 billion of investments. Numerous familiar names invested, including Lundin, Unilever, Argen Argentina, Nissan, DVA, Newsan, TN&Platex, MSU Energy, Roboplast, Groupe PSA, and many others.

  • Ford is planning on building its Ranger SUV in its General Pacheco plant. As soon as the new investment is approved, the estimated production will be 20,000 units per year.

  • General Motors resumed their investment plan of $300 million to manufacture a new vehicle in their plant in Alvear.

  • Brazilian oil company Raizen announced an investment of $715 million over the next three years to add a new line of fuel and increase production.

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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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