Mexican minister sees Hyundai, BMW interestMexico’s record auto production may get another boost from Bayerische Motoren Werke AG and Hyundai Motor, which are considering building factories in Latin America’s second-largest economy, Economy Minister Ildefonso Guajardo said.
The government has held talks with both companies and at least one of them may announce plans for a new plant next year, Guajardo said Wednesday in New York. That would mark Mexico’s first new car factory since April 2012, when Audi AG revealed plans for a $1.3 billion plant it started building this year to produce its Q5 sports-utility vehicle.
A BMW or Hyundai factory would further bolster Mexico’s auto industry, which set production and export records in 2012 and has continued to expand this year even as the nation’s economic growth has slowed. Nissan Motor, Honda Motor and Mazda Motor are building plants in central Mexico, while U.S. automakers Ford Motor and General Motors are investing in additional production.
“With both of them, there have been conversations with us for future plants,” Guajardo said in reference to BMW and Hyundai. “I cannot talk for them, but I think that starting in 2014 we’ll have new announcements. At least for one.”
Song Mee-young, a spokeswoman for Hyundai in Seoul, said in an e-mail that the automaker “currently has no plans to build a plant in Mexico.” Elizabeth Solis, a BMW spokeswoman in Mexico City, did not respond to a messages seeking comment.
Mexican auto output rose 4.4 percent in the first eight months of the year from a year earlier to 1.99 million vehicles, according to the Mexican Automobile Industry Association. Production last year climbed 13 percent to a record 2.88 million.
Autos, aerospace and electronics are “the leading industries in terms of foreign direct investment,” which is on target to more than double to $35 billion this year, Guajardo said. Exports may rise 5 percent to $390 billion, he said.
Even discounting Anheuser-Busch InBev NV’s $20.1 billion purchase for full control of Corona brewer Grupo Modelo SAB, Mexico is set for a “dramatic” increase in foreign direct investment, Guajardo said.
“Investors are confident about Mexico’s future, regardless of the slowdown in the first semester,” he said. “There is a lot of trust in the future of the Mexican economy.”
Mexican exports increased just 1.4 percent this year through July to $217 billion, the worst start to a year since the end of the 2009 recession. Mexico sends about 80 percent of its exports to the United States.
“We are hopeful by the end of the year the U.S. economy will pick up and that will help the behavior of the Mexican economy,” Guajardo said.
Mexico’s central bank on Aug. 7 cut its growth forecast for 2013, projecting the slowest expansion in four years amid stagnant exports to the U.S. and a first-half drop in government spending. Gross domestic product will expand 2 percent to 3 percent, as little as half of last year’s pace and down from the 3 percent to 4 percent previously forecast, the bank said.
Policy makers unexpectedly cut interest rates on Sept. 6 by a quarter percentage point to a record-low 3.75 percent, their second move this year after a half point cut on March 8.
Guajardo, 56, an economist who got his doctorate from the University of Pennsylvania, became economy minister in December when President Enrique Pena Nieto took office. He previously served as a legislator in Mexico’s lower house and worked in the Foreign Ministry as a negotiator on the North American Free Trade Agreement and as an economist at the International Monetary Fund.
The economic effects of two hurricanes that left 139 dead in Mexico this month will be limited as the storms did not cause significant damage in leading manufacturing areas, Guajardo said.
“The impact on the economy will not be as severe as you may think,” he said. “The three main tourist spots, Cancun, Puerto Vallarta and Los Cabos were not touched by the hurricanes, therefore the main tourist centers of Mexico are strong.” Bloomberg
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