Nuevo Leon, Mexico: General Industry

An Expert's View about FDI in Mexico

Last updated: 25 Sep 2011

Summary
Often referred to as the industrial heart of Mexico, the state of Nuevo Leon and its capital, Monterrey, form the manufacturing cornerstone of Mexico. With 4,653,000 inhabitants, 45% of whom are economically active, the metropolitan area is constantly receiving new investors in large scale energy projects, wire harness and electronic assemblies, automotive and aerospace manufacturing, material sorting and parts kitting services, to mention a few.

While Mexico City has more industrial output than Monterrey, the large concentration of Mexican and foreign industrial giants that call Nuevo Leon home, gives credence to its title of the industrial heart of Mexico.

The state is responsible for generating over seven percent of Mexico’s GDP (almost 79.8 Billion USD in 2010). Despite the much-publicized deterioration of the security situation in this part of the country, the climate is still ripe for foreign investment. According to the State of Nuevo Leon Economic Development office, in 2010, the state registered over $2 billion in Foreign Direct Investment, ranking Nuevo Leon second after Mexico City in FDI for the year.

Undoubtedly, the majority of foreign investment is of US origin (52%). Some important investments also come from Japan (10%), Germany (8%) and the UK (7%). 2,600 US companies have established their operations in “Regio” soil (slang for “native of Monterrey”).

New investments in sporting goods and allterrain vehicles top the list of the latest U.S. manufacturing investments. Among the U.S. companies with a major presence in the market include Mary Kay Cosmetics, Whirlpool, Caterpillar, Hershey’s, Mattel and others.

  Monterrey is located about 200 miles from the U. S. border cities of Laredo and Hidalgo, Texas. Nuevo Leon also has its own international bridge with capacity of 12,000 trailers per day that connects with Interstate 35.

Market Demand
The inevitable growth in demand for general industrial products resulting from an expanding industrial base favors small and medium distribution businesses. Construction, maintenance and service industries are particularly strong. As companies struggle to reduce costs, more outsourced services are in demand.

The steady growth of industry demands rapid and reliable construction methods, machines, tools and safety items. Plant maintenance departments are devoted to minor electrical installations and repairs, creating an opportunity for specialized technical troubleshooting and repair services in general, with CNC and robotic equipment servicing in particular demand. Surveillance, training and specialized IT services are also in demand in both medium and large size companies.

Market Data
Monterrey was founded by the glass, steel and beer industries, and to this day, these activities are still driving forces in the economy. US exporters looking for opportunities in this market can look also to the automotive, cement, household appliances and construction equipment sectors for excellent prospects.

Given Monterrey’s geographic proximity to the U.S. and a longstanding preference for U.S. products in general, Nuevo Leon is an excellent market for seasoned as well as new exporting companies. Since 1980, the assembly industry has helped Nuevo Leon’s economy and raised the standard of living of the population. As of today, 25% of the population belongs to middle class, almost 8% to high-end middle class and just 9% are rich. 53% are still considered lower income and they integrate the labor force for the local industry.

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Posted: 25 September 2011, last updated 25 September 2011

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Expert Views    
Nuevo Leon, Mexico: General Industry   By U.S. Commercial Service