A New Automotive Factory in Mexico Could Boost Cross-Border Trade
After the announcement of the arrival of Tesla’s electric vehicle plant in the north of Mexico, some logistics experts say that the plant will have a significant impact on land transport and cross-border movements.
In addition, the plant will be in a prime location, as it will be in the municipality of Santa Catarina, about 136 miles from the main international point of entry to Laredo, Texas, which will increase trade on this route.
For some years now, there have been suppliers of this brand located in the north of Mexico that send parts to the electric car factory in Austin, Texas. Joining this trend, new foreign companies linked to the brand have announced the expansion of their plants or new investments in Mexico.
Therefore, it is speculated that with this growing demand for auto parts, export levels to the United States could rise by 3.5% annually, equivalent to $15 billion, which represents a 10% increase in exports related to the automotive industry.
New Logistics Opportunities
A large influx of cargo is expected in the Monterrey region, which is good for trade with the United States and Canada, triggering a sizable increase in demand for ground services. Due to the increase in demand for services, carriers will have to acquire more units.
The United States-Mexico-Canada Agreement (USMCA) and nearshoring represent great advantages for this factory as they will allow the market to expand and keep its production moving, in addition to continuing to attract foreign direct investment for different sectors.