Borderlands is a weekly roundup of global trends in cross-border trucking and trade between the U.S. and Mexico. This week, we cover foreign direct investment in Mexico reaching $39 billion by 2024, BNSF announcing an intermodal logistics hub near Phoenix, a trailer manufacturer opening a production facility in Eagle Pass, Texas, and Doosan Bobcat beginning construction of a $300 million factory in Mexico.
According to Mexico’s Ministry of Economy, foreign direct investment (FDI) into the country totaled $38.2 billion from January to May, and global companies remain bullish on Mexico’s economic outlook.
This figure is a 35% increase from the $29 billion FDI Mexico recorded for the same period in 2023. According to the U.S. Bureau of Economic Analysis, FDI is measured as investment to expand, acquire or set up a new business in a country.
The majority of investment in Mexico in the first five months of the year came from the United States, accounting for $20 billion (51% of FDI). Germany came in second with $5.7 billion (14%), and Argentina came in third with $4.4 billion (11%).
According to the Ministry of Economy, manufacturing was the largest source of investment during this period, accounting for $21.8 billion (56%) of foreign direct investment during the period. Transport came in second with $5.1 billion (13%), and trade came in third with $5 billion (13%).
Ritesh Kumar, senior manager at SmartCube, said the consultancy has been approached by a range of companies looking to invest in Mexico.
London-based The Smart Cube provides strategic research and analytics solutions and is part of WNS Ltd., a business process management company with offices in New York, London and Mumbai.
“Right now, we’re seeing companies across a range of sectors looking to invest in Mexico, and we’re seeing a number of announcements,” Kumar told FreightWaves in an interview. “The good thing about these announcements is that they’re no longer limited to traditional manufacturing companies. We’re seeing more high-tech companies, life sciences, medical devices and other sectors. As always, automotive, aerospace, semiconductors, mass media, commercial industries — all of these sectors are seeing investments in Mexico.”
Kumar said any company should “future-proof” its profits before investing in Mexico or any other country.
“The most important thing for any organization to take into consideration when considering nearshoring is not to be short-sighted. The decision should not be targeted at short-term cost savings or efficiency,” says Kumar. “It should be based primarily on an assessment of the long-term strategic vision based on the stability, reliability and robustness of the supply chain. They need to ensure that their decision is future-proof and will not only meet their immediate requirements but can scale and meet future requirements as the organization grows.”
Among the latest investments announced in Mexico in the first five months of the year were by Evergo, L&T Precision and Daikin Industries, according to Mexico’s Ministry of Economy.
Evergo is a Dominican Republic-based manufacturer of electric vehicle chargers. Evergo is investing $200 million to install 15,000 charging stations across Mexico.
Poway, Calif.-based L&T Precision Corp. announced it has signed a $142 million contract to build a factory in Tijuana, Mexico. L&T Precision is a provider of machining and sheet metal fabrication services.
Daikin Industries, a Japanese manufacturer of air-conditioning equipment, is investing $130 million to build a factory in the Mexican city of San Luis Potosi.
Kumar said other considerations before moving manufacturing to Mexico include sourcing of raw materials and supplies, tariffs and geopolitical risks.
“First of all, they need to know where their ideal sourcing is, is it Mexico or is it a company based in the UK or France? They need to uncover supply chain interdependencies, look at their tier 2 and tier 3 suppliers and ensure their supply chain is future-robust,” Kumar said. “Another thing we can help with is looking at trade data, tariff analysis, what tariff exemptions are available between various partner countries, etc. Finally, one of the core elements we provide is risk-related information, which allows them to look at the geopolitical risks associated with new nearshoring destinations.”
BNSF Announces Intermodal Logistics Hub Near Phoenix
BNSF Railway plans to build a 4,321-acre logistics hub near Phoenix to enhance the transportation, storage and distribution of freight throughout Arizona and the Southwest and promote sustainability, the company announced in a news release.
The hub will include a 1,770-acre intermodal terminal, an adjacent 1,420-acre logistics park for warehousing and distribution, and a 1,131-acre logistics center with direct rail access to support local industry.
BNSF officials said the facility is scheduled to open in 2028.
Trailer manufacturer opens production facility in Eagle Pass, Texas
Utility Trailer Manufacturing Co. recently announced the opening of its Cargobull North America (CBNA) assembly plant and warehouse in Eagle Pass, Texas.
The facility is adjacent to Utility Trailer Manufacturing Co.’s Southeast Texas dealer location. The manufacturing plant and dealer will focus on final assembly operations for CBNA’s transport refrigeration units, as well as final assembly of remote evaporators, solar panels and telematics hardware.
Utility Trailer Manufacturing Co. is a manufacturer of dry van, flatbed and refrigerated trailers headquartered in City of Industry, Calif. The company operates six manufacturing facilities across North America, including a factory in Piedras Negras, Mexico, just across the border from Eagle Pass.
Doosan Bobcat begins construction of $300 million factory in Mexico
Doosan Bobcat recently began construction on a new factory in Monterrey, Mexico.
The 700,000 square foot facility will produce the company’s Bobcat M-Series compact loaders for North America.
The $300 million manufacturing plant was announced in November and is expected to open in 2026. It could create up to 800 jobs.
Doosan Bobcat manufactures construction and agricultural machinery and is a subsidiary of South Korea’s Doosan Group.
