Category Archives: Infrastructure

Carmakers’ $23 billion Mexico ventures might face snarls at ports

Mexico is boosting operating capacity at ports by 50 percent through 2018 and doesn’t foresee any bottlenecks.
Mexico is boosting operating capacity at ports by 50 percent through 2018 and doesn’t foresee any bottlenecks.

By Nacha Cattan and Benjamin Bain / Bloomberg

Carmakers from Nissan Motor Co. to Mazda Motor Corp. are churning out record numbers of vehicles in Mexico destined for consumers abroad. Yet some executives are worried that the factory hum will slow in coming years as exports get bogged down by congestion at the nation’s ports.

The government has targeted 70 billion pesos ($4.6 billion) for port infrastructure through 2018, including building four new terminals in Veracruz. Some automakers are skeptical that the goal will be met or will be enough to handle the more than 5 million vehicles Mexico expects to produce annually by 2020, a 56 percent increase from the country’s 2014 output.

In the past two-and-a-half years, car manufacturers including Toyota Motor Corp. and Daimler AG, have invested or promised $22.6 billion for auto and parts plants, according to the government. That success story, which made the sector the largest source of foreign cash in the country, may be imperiled if the government doesn’t speed up plans for infrastructure improvements.

“Up until now, Mexico has succeeded in attracting more investments,” said Carlos Serrano, chief economist for BBVA Bancomer, Mexico’s biggest bank by loans outstanding. “But there’s going to come a point, when if infrastructure doesn’t get better, it’s going to put Mexico’s continued advance at risk.”

http://www.bloomberg.com/news/articles/2015-05-26/carmakers-23-billion-mexico-venture-may-face-snarls-at-ports