Queretaro, Quero. The relocation (closer) of suppliers has already translated into greater demand for components for the local automotive industry, which is reflected in the arrival of new investments, the expansion of production centers, and higher purchase requirements.
Renato Villaseñor Mendoza, president of the Querétaro automotive cluster, said he is aware of at least five new investment projects for the region from Tier 1 and Tier 2 companies of European and Asian origin.
These are projects that are under management process to reach the state; He informed that setting up a new production center may take more than a year.
The development of infrastructure to increase Querétaro’s electricity capacity – he remarked – will allow the supply of electricity not to brake at the arrival of more companies, as is the case with these investments.
“There are new projects coming up, projects coming up that are looking for a niche with companies that are already established and projects that were companies that were buying components in other countries that are now looking for suppliers in the region being able to develop and supply them, so the combination of these three effects and together is having a positive effect”, he noted.
In addition to the near term, another factor affecting industry productivity is the upcoming entry into force of the Regional Value Content regulations of the Treaty between Mexico, the United States and Canada (T-MEC).
With the passage of the first quarter of the year, the local automotive industry has registered positive growth which reinforces the annual forecasts. The chairman of the cluster said that they started the year with growth in the range of 4 to 6%, but currently it is between 5 and 7%, these are variations within the growth projection that is set in a parameter 5 to 10% by the end of 2023.
“We have a positive balance, in fact as the year progresses the forecasts are updated upwards, supported basically by all the projects that are being moved and all the new opportunities that are emerging, Let’s remember that the value added of regional content is being in free trade agreements, where companies have to operate locally and the whole issue of taking advantage of the treaty as a result of companies coming in, to open up opportunities,” he said.
At the moment, forecasts for auto parts production are being met in most cases; And in terms of restoring supply chains, they are making progress in their recovery, though not completely stabilized.
“Let’s remember that assemblers had empty yards because there were no components, because there is a fruit — it’s not regulated yet, but flows are increasing — assemblers are taking advantage to recover those inventory levels. Those were there to be able to respond more to the consumer, benefiting the auto parts industry in general in Querétaro,” he said.
However, some breaks in the supply chain remain: Volkswagen’s case is such that the assembly line in Puebla was closed for a month, a situation that has had an impact, but -he said- in the end the overall balance is positive.