Companies from the United States were the biggest foreign investor in Mexico during the first five months of the year, totaling over $20 billion. (Photo: Jim Allen/FreightWaves)
Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Foreign direct investment in Mexico $39B so far in 2024; BNSF announces intermodal logistics hub near Phoenix; Trailer manufacturer launches production facility in Eagle Pass, Texas; and Doosan Bobcat begins construction of $300M plant in Mexico.
Foreign direct investment in Mexico $39B so far in 2024
Global companies continue to be bullish on Mexico’s economic prospects, as foreign direct investment (FDI) into the country totaled $38.2 billion from January through May, according to the country’s economy ministry.
The figure was a 35% increase compared to the same period in 2023, when Mexico recorded FDI of $29 billion. FDI is measured as investments to expand, acquire or establish new business in a country, according to the U.S. Bureau of Economic Analysis.
The majority of investments in Mexico in the first five months of the year came from the United States, which accounted for $20 billion (51% of FDI). Germany ranked No. 2 at $5.7 billion (14%) and Argentina came in third with $4.4 billion (11%).
Investments during the period were heaviest in the manufacturing industry, accounting for $21.8 billion (56% of FDI) for the period, the economy ministry said. Investments from the transportation sector came in second, accounting for $5.1 billion (13%), while investments in the trade industry ranked third at $5 billion (13%).
Ritesh Kumar, a senior manager at The Smart Cube, said the consultancy is hearing from a diverse range of companies looking to invest in Mexico.
Based in London, The Smart Cube provides strategic research and analytics solutions and is part of WNS Ltd., a business process management company with offices in New York, London and Mumbai.
“We have seen companies from across sectors who are now looking to invest in Mexico, and there have been a number of announcements that have been made,” Kumar told FreightWaves during an interview. “The good thing about these announcements, they’re not only limited to traditional manufacturing companies anymore. Increasingly what we see are high-tech companies, as well as areas such as life sciences, medical devices and so on. As usual, we see automotive, aerospace, semiconductors, mass media and commercial industries, all of these sectors, we are seeing investments coming into Mexico.”
Kumar said before any company invests in Mexico or any other country, it should “future-proof” its interests.
“When we are looking at nearshoring, the most important thing for any organization is that they should not really be shortsighted about it; they should not look at short-term cost savings or efficiencies as the goal for driving their decision,” Kumar said. “It should be largely based on their assessment of long-term strategic vision, which is based on stability of the supply chain, reliability and robustness of the supply chain. They have to make sure that the decision they have made is future-proof, not only meeting their immediate requirements, but they are also able to scale up as the organization grows and they are able to take care of their future requirements.”
Some of the most recent investment announcements during the first five months of the year in Mexico were from Evergo, L&T Precision Corp. and Daikin Industries, according to Mexico’s economy ministry.
Evergo is a Dominican Republic-based electric vehicle charger manufacturer. Evergo is investing $200 million to install 15,000 charging stations across Mexico.
Poway, California-based L&T Precision Corp. announced a $142 million deal in Mexico to build a factory in Tijuana. L&T Precision is a provider of machining and sheet metal fabrication services.
Japan-based Daikin Industries, a company that manufactures air conditioning units, is investing $130 million to build a factory in the Mexican city of San Luis Potosi.
Kumar said other considerations before relocating manufacturing to Mexico should be sourcing of raw materials and supplies, as well as tariffs and geopolitical risks.
“First and foremost, we have to know what should be the ideal sourcing destination, whether it is Mexico or if there are companies that are based in the U.K. or France. We have to unearth the supply chain interdependencies, look at the Tier 2 and Tier 3 suppliers, and ensure that their supply chain will be robust in the future,” Kumar said. “Another thing we would help with is trade data, analysis of tariffs, looking at which duty exemptions are available between the different partner countries and so on. Lastly, one of the core elements that we offer is risk-related intelligence where we can look at geopolitical risks related to any new nearshoring destination.”
BNSF announces intermodal logistics hub near Phoenix
BNSF Railway plans to build a 4,321-acre logistics hub near Phoenix to enhance transportation, storage and distribution of goods throughout Arizona and the Southwest and promote sustainability, the company said in a news release.
BNSF plans to build a 4,321-acre intermodal logistics hub near Phoenix scheduled to open in 2028. (Photo: Jim Allen/FreightWaves)
The hub includes a 1,770-acre intermodal terminal, an adjacent 1,420-acre logistics park for warehousing and distribution, and a 1,131-acre logistics center featuring direct rail-served sites to support local industries.
BNSF officials said the facility is scheduled to open in 2028.
Trailer manufacturer launches production facility in Eagle Pass, Texas
Utility Trailer Manufacturing Co. recently announced the opening of its Cargobull North America (CBNA) assembly plant and warehouse in Eagle Pass, Texas.
The facility is adjacent to Utility Trailer Manufacturing Co.’s Southeast Texas dealer location. The manufacturing plant and dealership will focus on the final assembly operation of CBNA’s transport refrigeration units, along with final assembly of remote evaporators, solar panels and telematics hardware.
Utility Trailer Manufacturing Co. is a dry van, flatbed and refrigerated trailer manufacturing company headquartered in City of Industry, California. The company operates six production facilities across North America, including a plant across the border from Eagle Pass in Piedras Negras, Mexico.
Doosan Bobcat begins construction of $300M plant in Mexico
Doosan Bobcat Inc. recently began construction of a new factory in Monterrey, Mexico.
The 700,000-square-foot facility will produce the company’s Bobcat M-Series compact loaders for North American distribution.
The $300 million manufacturing plant was announced in November and is scheduled to open in 2026. It could generate up to 800 jobs.
Doosan Bobcat Inc. manufactures construction and agricultural machines. The company is a subsidiary of South Korea’s Doosan Group.
