The “Made in Mexico” label has become more plentiful on American car lots this year, even as auto makers pressured by President Donald Trump kicked off the year with promises to create more jobs in the U.S.

A move by auto makers to produce some popular sport-utility models in Mexican factories helped spur a 16% increase in production of light vehicles in Mexico during the first six months of the year compared with the same period in 2016. At the same time, tepid sales of sedans held down production in the U.S. and Canada, according to new data posted by WardsAuto.com.

The data indicates one in five cars built in the North American Free Trade Agreement zone comes from Mexico, including hot new products from General Motors Co. and Fiat Chrysler Automobiles NV. That is up from the industry’s reliance on Mexico during the financial crisis, when the U.S. car business received billions of dollars in bailouts aimed at preserving jobs and keeping domestic players afloat.

Mr. Trump launched several attacks on Mexican car imports throughout his campaign and after his election, saying more auto-factory jobs should remain in the U.S. Since then, auto makers have committed to several initiatives, including a move by Ford Motor Co. to scrap a new assembly plant being built in Mexico and invest some of the money saved in a Michigan factory that will add jobs. GM and Fiat Chrysler have said they intend to invest billions of dollars to add jobs in factories in coming years, citing favorable policies related to tax reform and other issues as reason for optimism.

The Trump administration in August will kick off new talks with Canada and Mexico on an overhaul to Nafta. The vehicle-manufacturing business — including a sprawling supply base — is a central negotiation point.

The latest data from WardsAuto shows that U.S. light-vehicle manufacturing fell 5% during the first six months of this year from a year earlier, as auto makers shed workers or scheduled significant downtime to counter a slowdown in demand for sedans. A substantial chunk of America’s automotive manufacturing footprint is devoted to production of family cars or compact cars, which aren’t faring well as gasoline prices remain low and sport-utility vehicles grow in popularity.

Separate U.S. trade data shows that the value of light-vehicle imports from Mexico to the U.S. ballooned 40% through May.

United Auto Workers President Dennis Williams told reporters last week that the union is planning to launch a “Made in America” campaign later this year, an effort to support hundreds of thousands of members building vehicles or parts in U.S. factories. Mr. Williams is looking to follow the Trump administration’s focus on American-made products and will use the effort to educate consumers on how to know if a car is built in America.

Finding those cars is getting harder.

Pickups such as some versions of FCA’s Ram and Chevrolet Silverado, two of the best-selling vehicles in America, are built in Mexico.

GM and Chrysler this year also started producing small crossover SUVs in Mexican plants; these are considered important vehicles for U.S. dealerships because of their growing popularity as consumers shift away from passenger cars.

GM shifted some production of a revamped version of its popular Chevrolet Equinox crossover SUV to Mexico from plants in U.S. and Canada. Over the next few years, the largest U.S. auto maker is expected to add other new models to factories south of the border.

Most of Fiat Chrysler’s increase comes from a decision to shift North American manufacturing of the Jeep Compass from the U.S. to Mexico. An all-new version of that small SUV is being built at FCA’s plant in Toluca, Mexico, which has seen year-to-date production increase 177%, according to WardsAuto.

Meanwhile output at FCA’s factory in Belvidere, Illinois is down nearly 93% year to date, as production of the older Compass model has ended and two new models of the Jeep Patriot and Dodge Dart were canceled. That plant has been retooled for production of a new Jeep Cherokee midsize SUV, which just began in June after being shifted from a Toledo facility.

 

Source: http://www.foxbusiness.com/markets/2017/07/25/more-u-s-cars-are-being-made-in-mexico.html

 

By Kenneth Rapoza

Mexico has a lot of well-known problems. Drugs. Poverty. Corruption. And on the corporate side, low-levels of production outside of the major multinational owned manufacturing firms. But despite the campaign rhetoric to build a wall and to knock Mexico down a peg in a NAFTA do-over, there is one problem our neighbor does not have: beating every single equity market in the Americas to a pulp.

For investors, Mexico is great…again. After a slight lull in affection back in April, the market has rediscovered Mexico now for the past two months. The trend is seen continuing until the fourth quarter.

Mexico was already great at the end of last year on into January for bond investors. They bought local currency Mexican government bonds when the peso fell to its lowest level on record, around 22 to the dollar. It’s now 17.17 to the dollar.  Those investors have gained at least 14.8% since January on the currency alone. The second-place currency in terms of strength against the dollar this year is the Brazilian real and that’s only gained 3.5%.

Morgan Stanley says the Mexico bull run is not over.

Economist Luis Arcentales of Morgan Stanley in New York says the mood has markedly changed since Trump first won the White House. “Besides the great food and the awful traffic, I did sense a shift among local investors who seemed much more constructive about Mexico after having been quite cautious because of a whole host of factors ranging from domestic politics to concerns about protectionism,” he says.

Last week’s news on upcoming NAFTA revisions helped strengthen Mexican markets seven more.  Many of the elements added, such as beefing up local content rules for manufacturers, protecting intellectual property rights and labor provisions were included in President Obama’s failed Trans-Pacific Partnership negotiations, and both Mexico and Canada agreed to make those concessions out of concern that the U.S. would bail and turn to Asia instead. NAFTA renegotiations begin on Aug. 16.

For Arcentales, barring the proposal to scrap the Chapter 19 rule in NAFTA on anti-dumping and trade duty matters in favor of the U.S., most Mexico watchers today think NAFTA just gets better, not worse.

Mexico has benefited from better coordination between the federal government’s two most important entities: oil firm Pemex and the central bank of Mexico, Banxico. Fiscal and monetary policies are tighter, energy reform that allows for greater foreign participation (meaning less spending for Pemex) has been a success thus far, and the central bank managed to protect the currency well, with ample reserves in a severe downturn.

Morgan Stanley strategists say they see “a window of opportunity to express a bullish view” on Mexico at least until their presidential elections next summer. Morgan analysts expect volatility to pick up in the first quarter.

“The story for the Mexican peso will be different in 2018,” says Andres Jaime, a strategist at Morgan.

The peso is unlikely to move closer to the dollar than 17 pesos. It’s already up from 18.12 when FORBES ran its portfolio manager profile on BlackRock’s Gerardo Rodriguez in June. Next year, political uncertainty will have a bigger influence on the currency and on Mexico in general, with volatility kicking into high gear by March. “Some cheapness in the currency is a near certainty in my view, particularly in the second quarter of 2018,” Jaime says.

For now, Mexico is still in the sweet spot. There’s potential for more upside.

Mexico seems to be in the midst of a period of relative calm. Investors have decided to shelve politics for now, possibly until NAFTA negotiations are well under way. Or in early 2018, when party alliances and candidates are defined. The economy is facing a full employment scenario similar to that of the United States. The official unemployment rate as of June is just 3.3%, down from 3.5% for much of the year. The net labor force participation rate rose to 59.3% from 59.2% in May.

Industrial production remains tepid, but that is because the statistical element is heavily weighted towards Mexico’s energy sector and construction.

Mexico continues to face downside risks from public spending cuts, higher gasoline prices and slightly higher interest rates, but it has since avoided the most adverse scenarios trumped up by the media, with the help of the president himself.

To date, there has been no mass deportations of Mexico’s illegal U.S. residents. Such a move would have put undue strain on Mexican public services. Many Mexicans in the United States, included undocumented workers, send money to their families in poor cities and towns across the country. That’s less money the Mexican government has to spend on social welfare, having counted on money from Mexican-Americans now for generations.

NAFTA meanwhile is still firing on all four cylinders, wiping out fears that Trump would sign an executive order calling for the immediate withdrawal from the trade treaty signed in 1995 under President Bill Clinton. They’ve dodged two bullets, helping, for investors anyway, to make Mexico great again.

“Mexico’s better than expected economic performance adds to 2017’s resurgence of emerging markets which is lifting global GDP growth back to potential,” says PNC Financial’s senior international economist Bill Adams in Pittsburgh. “The global economy has reached the sweet spot of the economic expansion,” he says, and within Latin America at least, Mexico is smack dab in the middle of that sweet spot.

 

Source: https://www.forbes.com/sites/kenrapoza/2017/07/24/for-wall-street-mexico-is-great-again/#125eaba576cd

 

By Anthony Esposito

MEXICO CITY (Reuters) – Mexico’s government on Monday said it would work to strengthen the North American economy after the United States published its objectives for the renegotiation of the NAFTA trade deal, which one Mexican official described as “not as bad” as feared.

In a statement, the Mexican economy ministry said it expected talks between the United States, Mexico and Canada on renegotiating the North American Free Trade Agreement (NAFTA) to be able to get under way from Aug. 16.

For now, Mexico would continue with domestic consultations on the revamp of the accord until early August, it added.

The ministry said it would work “to achieve a constructive negotiation process that will allow trade and investment flows to increase and consolidates cooperation and economic integration to strengthen North American competitiveness.”

The United States said its top priority for the talks was shrinking the U.S. trade deficit with Mexico and Canada, a recurring complaint of U.S. President Donald Trump. [L1N1K8149]

In a highly anticipated document sent to lawmakers, U.S. Trade Representative Robert Lighthizer said he would seek to reduce the trade imbalance by improving access for U.S. goods exported to Canada and Mexico under the three-nation pact.

Speaking under condition of anonymity, a senior Mexican official said the list of priorities was “not as bad as I was expecting” and welcomed that the United States was not pushing to impose punitive tariffs, as Trump has threatened.

The official also noted the U.S. wish to ditch the Chapter 19 dispute settlement mechanism that has hindered the United States from pursuing anti-dumping and anti-subsidy cases against Mexican and Canadian firms would be resisted firmly by Canada.

“Canada will fight to (the) death on Chapter 19,” the official said.

 

Source: https://www.reuters.com/article/us-usa-trade-nafta-mexico-idUSKBN1A301D

 

NAI Mexico is pleased to invite you to the Tijuana Operations Directors Forum, Wednesday, June 14th.

Global industrial operations executives in Northern Mexico are meeting for lunch at Club de Empresarios de Baja California , Tijuana, from 1:00 – 3:00 p.m.
​​
The event will feature 3 industry experts— providing thought leadership from ​the Otay Mesa Chamber of Commerce (Cali-Baja unique global location), Seraph (management consulting), and NAI (global business advisory) discussing the US political election, Mexico operations competitiveness, potential tariff impacts, and how executives can remain competitive during 2017’s disrupted market uncertainty. The luncheon event is complementary to NAI invited clients .

The main objective is to:

  • Share operations impacts in Mexico due to the US election,
  • Tools available to planning managers to understand their competitive position in Mexico,
  • Tools to help operations remain competitive with their internal corporate operations in the US— and world markets.

 

The Tijuana Operations Directors Forum  will present the impact of US political elections, latest trends in Mexico, and how directors can support their 2017 planning processes. The agenda will include:

  1. Welcome and Introduction to Visitors
    • Host Welcome:   NAI Mexico, Gary Swedback, CEO
      • Introduction to the Presenters
  2. Current Trade Developments the Cali-Baja Region
    • Presented by:   Otay Mesa Chamber of Commerce Alejandra Mier y Teran Executive Director www.otaymesa.org
      • Cali-Baja Region Overview
      • Regional Infrastructure Projects Impacting Trade
      • Cali-Baja Perceptions Regarding Impact from US Political Election: What to Expect
  3. Impact of US Elections on Foreign Industrial Operations in Mexico: Planning 2017
    • Presented by:   Seraph   Ambrose Conroy: Founder and Managing Partner   www.seraph.com
      • Proposed Changes by the Incoming US Leadership
      • Likely Impact on Foreign Firms and Exporters in Mexico
      • Preparation Suggestions by Industry Sector
  4. Tools for Planning in Mexico and Other Markets
    • Presented by:   NAI Mexico   Gary Swedback: CEO   www.naimexico.com
      • US Elections: Feedback from Our Global Clients
      • Planning Mexico vs. Other Markets
      • Multi-Market Comparison Analyses: Total Occupancy Cost
      • New Tools Available for Operations Planning: 2017 :  How to Stay Ahead
  5. What Are Most Important Issues to Maintain Competitiveness for Management Teams in Northern Mexico?
    • Roundtable and Interactive Discussion
    • Largest Challenges Perceived for 2017

Location: 
Club de Empresarios de Baja California, Manuel Marquez de Leon 1301 Torre Diamante, Piso 26 New City Zona Urbana Rio 22010, Tijuana, B.C., Mexico.

 

Best Regards,

With our ongoing effort to keep you informed regarding the impacts of NAFTA on your clients and in Mexico, please receive this invitation to NAIOP’s I.CON ’17: Trends and Forecasts conference, on June 8-9.

I will be speaking regarding the impact of the US Political Election on NAFTA, Mexico, and real estate projects for your clients.

I hope you can join us in Long Beach, CA.  My panel session starts at 9:00 am on Thursday.

Here is the link: http://www.naiop.org/icon17trends.

Let me know if you would like to know more regarding the pending changes to NAFTA and how to keep your clients informed.

As always, lets work together.

Best Regards,

Tijuana, Baja California – Mexico continues to be a major focus for hotel and resort development for both local and international hotel brands and operators, due to rapidly accelerating demand during 2017. This also includes integrated Mixed Use projects, focused on a mix of residential, retail and hospitality.

The Caribbean and Mexico Hotel & Resort Expansion Forum gathers high-level executives from Government Developers, Investors, Regulators, Construction Companies, Architects, Solution Providers, Financial Institutes and Associations in a focused two-day program. Panel presentations will share investment strategies, operations efficiency and updated technologies. The 2nd Mexico Hotel & Resort Expansion Forum scheduled from 7th-8th June, 2017, Hilton Santa Fe, Mexico City, Mexico.

Mr. Hoekstra noted:

“Excellent event with top level speakers and attendees, offering an informative platform to grow your business and network with peers and colleagues”

Mr. Hoekstra is the national Director of the Mixed Use & Capital Markets Division at NAI Mexico. Mr. Hoekstra will chair: Mixed Use Development: the Next Generation. This panel will host recognized LatAm experts sharing forecasts and strategies for integrated hospitality, residential, and retail uses. Mr. Hoekstra leads teams of experts managing strategic locations throughout Mexico, providing a wide variety of professional services, from financial advisory to disposition and acquisition brokerage

For tickets and agenda select the follow link: http://hotel2.mykar-events.com/

For more information please contact: hhoekstra@naimexico.com

TIJUANA, Baja California, May 26, 2017  NAI Mexico announced today it will host the “TIJUANA Operations Directors Forum” for global industrial operations executives on Wednesday, June 14, 2017.

The event will feature 3 industry experts providing thought leadership from Otay Mesa Chamber of Commerce (Cali-Baja unique global location), Seraph (management consulting), and NAI (global business advisory) discussing the US political election, Mexico operations competitiveness, potential tariff impacts, and how executives can remain competitive during 2017’s disrupted market. The event is complementary to NAI invited clients.

NAI Mexico CEO Gary Swedback noted:

“The main objective is to enable operations managers to understand impact in Mexico due to the US election, tools for planning managers and how to help their operations remain competitive, internallly in the US, and world markets”

The event will be hosted at Club de Empresarios de Baja California, for a small—select group, limited to 40 executives Wednesday, June 14, from 1:00 – 3:00 p.m.

For additional info please visit: http://naimexico.com/operations-directors-forum-tj/

NAI Mexico is an exclusive member of NAI, the world’s leading managed network of commercial real estate firms serving over 390 markets worldwide.
NAI Mexico advises both Mexican and global clients through a platform of 11 offices in Mexico. In addition to traditional leasing and sales, NAI Mexico offers additional integrated services for design and construction, project management, valuation, advisory consulting, market analytics, capital markets and supply chain solutions.

For more details and agenda, please contact:
Sandra Soto
T (664) 971 0333
ssoto@naimexico.com

By Dave Graham and Ana Isabel Martinez

MEXICO CITY (Reuters) – Companies no longer fear the North American Trade Agreement (NAFTA) will collapse and top U.S. multinationals in Mexico are committed to investing in the country going forward, the head of a global business lobby said on Wednesday.

Frederic Garcia, President of Mexico’s Executive Council of Global Companies (CEEG), said preparations to renegotiate NAFTA and growing awareness of the accord’s economic benefits had all but put an end to fears that the deal would be scrapped.

“There was a moment where the probability, or the perception that NAFTA would end, was very strong,” Garcia said in an interview in Mexico City. “But today I think there’s an awareness that it will continue. The big worry that the deal could come to an end is an issue that’s behind us.”

The CEEG represents a host of multinationals in Mexico including AT&T Inc , Coca-Cola Co , General Motors Co , Microsoft Corp , Exxon Mobil Corp , Nestle, HSBC, Siemens and IBM Corp , which it says account for around 40 percent of total foreign direct investment.

It and other business associations have been active in extolling the benefits of NAFTA to Americans to counter threats by U.S. President Donald Trump to dump the 23 year-old accord that binds the United States, Mexico and Canada.

Mexico’s Economy Minister Ildefonso Guajardo said on Tuesday he expected the U.S. government to notify Congress early next week of plans to rework the accord, yielding talks by late August.

It was not yet clear how NAFTA would be revamped, but if Mexico’s efforts to update its free trade deal with the European Union proved instructive, it could include provisions to boost corporate compliance and adherence to the law, Garcia said.

Trump said last month he was ready to renegotiate NAFTA with Mexico and Canada, though since taking the presidency in January he also has maintained that the United States could withdraw from the agreement if talks did not work in favor of his homeland.

Arguing the accord has destroyed U.S. jobs, Trump has menaced multinationals manufacturing in Mexico with punitive tariffs, and his threats to quit NAFTA. This sent the peso to a record low in January.

Earlier that month Ford abruptly canceled a $1.6 billion plant in central Mexico following verbal attacks by Trump. But as the rhetoric from the White House began to moderate, the peso has recovered somewhat, and fears for NAFTA’s future have eased.

Last week, a Mexican business lobby said it expected investment to drop slightly this year due to uncertainty over Trump, but Garcia said the CEEG would make no forecasts over projected outlays to avoid drawing attention to the matter.

“As far as the U.S. firms in the CEEG go, from the first day of the new U.S. administration they’ve stated their great interest to continue operating in Mexico (and) their great interest to continue investing in Mexico,” he said.

However, they had done so in such a way as to preserve their interests with the U.S. administration, Garcia added.

 

Source: http://money.usnews.com/investing/news/articles/2017-05-17/nafta-demise-fears-fade-as-us-firms-committed-to-mexico-lobby 

 

 

NAI Mexico would like to thank you for attending the CDMX Operations Directors Forum on Thursday April 6, 2017.

We hope that the Forum was of interest and that the plans and tools shared will be useful in order to remain competitive with political changes taking place in the Mexican economy.

Once again we thank you for your attendance and wish you all the best in all of your business planning for 2017.

Call us if you would like to discuss the tools we offered during the forum.

Read the latest car news and check out newest photos, articles, and more from the Car and Driver Blog.

 

NAI Mexico would like to thank you for attending the Monterrey Operations Directors Forum on Thursday March 30, 2017.

We hope that the Forum was of interest and that the plans and tools shared will be useful in order to remain competitive with political changes taking place in the Mexican economy.

If you didn’t get a chance to register to this event, you are still on time to attend our next one in CDMX next Thursday April 6, 2017.

Once again we thank you for your attendance and wish you all the best in all of your business planning for 2017.

Call us if you would like to discuss the tools we offered during the forum.

Gary Swedback 
CEO – NAI Mexico

Read the latest car news and check out newest photos, articles, and more from the Car and Driver Blog.