Foreign Direct Investment in Latin America and the Caribbean 2017

172 Chapter III Economic Commission for Latin America and the Caribbean (ECLAC)
without abandoning its established large scale operations, Mexico has in recent years begun
targeting more demanding segments, such as CUVs, SUVs and pickups. It has achieved
this through sizeable investments in state-of-the-art platforms, which allow high degrees
of flexibility in the scaling up of production to manufacture models that are increasingly
geared towards the global market. Additionally, and in response to the demands of the
United States market, Mexican vehicles now incorporate the latest technological advances
in connectivity and passenger entertainment, thus establishing the foundations for some of
the key features of tomorrow’s industry, such as electric-powered and self-driving vehicles.
The recent arrivals that specialize in high-end automobiles will be key players in this new
scenario insofar as their more global production outlook will support Mexico’s commercial
diversification, foster the arrival of new suppliers and strengthen the country’s research,
development and innovation activities.
C. Strengthening the network of suppliers
Up until the 2008 crisis, the Mexican automotive sector had one significant vulnerability:
its high dependency on imported inputs and an inadequate and weak network of local
suppliers. However, in recent years, the parts and components industry has been
the recipient of record investments (see figure III.12), which have translated into the
expansion and modernization of the country’s productive base and paved the way for
the arrival of over 700 new suppliers (Expansión, 2016) (see table III.3).
Table III.3
Investment announcements by automotive industry suppliers in Mexico, 2003-2016
(Millions of dollars)
2003-2010 2011 2012 2013 2014 2015 2016 Total
Robert Bosch GmbH 570 43 460 683 109 1 865
Magna International Inc. 339 100 108 208 159 914
Halberg Précision 600 600
DPH Holdings (formerly Delphi) 43 54 73 305 43 75 594
Caterpillar 500 500
Getrag Group 500 500
PPM Shenzhen 500 500
Johnson Electric 335 149 484
Yazaki Group 183 1 43 2 3 152 384
GKN 12 18 343 372
ThyssenKrupp (TK) 180 176 356
Continental AG 62 43 72 25 95 31 329
Commercial Vehicle Group 43 50 229 322
Autoneum 43 43 217 304
Hitachi 25 100 100 77 302
Total 2 183 531 1 064 1 049 654 1 857 989 8 328
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of Financial Times, fDi Markets.
German autoparts firm Robert Bosch GmbH, the largest supplier in the world, is the
main investor in the Mexican autoparts sector and has operated in the country for over
60 years (see table III.3). In the last 10 years it has invested more than US$ 400 million,
and expects to invest another US$ 500 million between 2016 and 2020. Through these
investments, it has been building its production capacity to satisfy the growing demand
for high-tech automobile parts in North America and Latin America (Bosch, 2016). Bosch
owns 10 manufacturing plants in Mexico, with the largest in Toluca and Ciudad Juárez. In
2013 it announced investments of US$ 300 million to increase the capacity of its Toluca
plant and focus most of its efforts on the supply of electric motors and gasoline systems
for the North American market (Bosch, 2013). Apart from its Toluca plant, between 2015 and