Monterrey Is Consolidating Its Automotive Hub
Monterrey continues to play a pivotal role in shaping Mexico’s economy and global trade through its thriving automotive industry.
Even though Monterrey has been a significant player in Mexico’s automotive industry for a few decades, the construction of Tesla’s Giga Mexico is changing the automotive industry landscape in Nuevo Leon.
The presence of multiple automotive manufacturing plants and a well-established supply chain network has made Monterrey a hot spot for auto parts production. Nowadays, Nuevo Leon is home to more than 200 automotive-related companies, contributing significantly to Mexico’s export industry.
The Monterrey metropolitan area is home to off-road vehicle manufacturing by Polaris and Kawasaki, heavy vehicle production by Daimler, and the KIA manufacturing site. Also, some Tier 1 suppliers are in Nuevo Leon, such as Vitro, Metalsa, Katcon, and Nemak.
Tesla’s Gigafactory Mexico Is Drawing Attention to Monterrey, Nuevo Leon
The construction of Giga Mexico in the Monterrey metropolitan area has caught the attention of automotive companies aiming to be part of Tesla’s supply chain. Even though Tesla already has 120 suppliers in Nuevo Leon, Coahuila, Tamaulipas, Chihuahua, El Bajio, and the State of Mexico, many others seek to be part of its supply chain and are short-listing Monterrey. In fact, 20% of the components of a Tesla vehicle are already made in Mexico. All of them send auto parts to Giga, Texas, and some of these suppliers are expanding operations in Mexico to accommodate new orders from Tesla and other EV manufacturers.
In Nuevo Leon, Tesla is supplied with semiconductors by Quanta Computer. At the same time, Noah Itech produces automation equipment and plans to offer services to electromobility companies once its new facility is operational. Furthermore, Brembo provides Tesla with disc brakes, AGP supplies high-quality glass, ZG Group manufactures advanced cameras and systems, and Vertiv specializes in data storage technology. However, Tesla holds significant importance for Nuevo Leon, with the company and its suppliers having a designated lane for exporting production to the U.S.
The Automotive Industry in Monterrey, Nuevo Leon
Last year, Monterrey exported US$60.1 billion in commodities, 20.4% more than the previous year. The products with the highest export value were machines and data processing units, accounting for US$4.4 billion; parts and accessories of motor vehicles, with US$3.1 billion; and electrical wires and cables, with US $2.9 billion, according to the latest data from the Ministry of Economy.
From January through August 2023, Monterrey exported US$5.2 billion worth of commodities, mainly to the U.S. market. Some of the highest-value commodities manufactured and exported to the U.S. via Monterrey are automotive-related, such as internal combustion motor parts, wire harnesses, and auto parts.
Moreover, OEMs in Mexico are increasing production and launching new vehicles; therefore, the demand for the commodities manufactured in Monterrey will soar in the upcoming years. From January to November 2023, OEMs in Mexico manufactured 3.56 million vehicles, 16.1% more than in the same period in 2022, the Mexican Association of the Automotive Industry (AMIA) data shows.
All this economic activity presents exciting opportunities for job creation, technological advancements, and economic development not just for the Monterrey metropolitan area but for Mexico.
Overall, the automotive industry in Monterrey is thriving and shows no signs of slowing down. With its long-standing history, strategic location, established infrastructure, skilled workforce, and progressive mindset, Monterrey is poised to remain a top player in Mexico’s automotive manufacturing landscape and beyond. Monterrey will undoubtedly stay at the forefront of innovation and growth in this vital sector as the automotive industry continues to evolve and adapt. If you are interested in learning more about automotive manufacturing opportunities in Monterrey, Nuevo Leon, we recommend you speak to one of our industry experts.