The Bajío region is considered one of the biggest manufacturing centers in North America and one of the most important industrial corridors in the country.
Aguascalientes, Querétaro, Guanajuato, San Luis Potosí and Zacatecas, as well as some parts of Jalisco and Michoacán, integrate the region known as Bajío, located in central-western Mexico.
The Bajío, labelled as the Mexican Diamond by Professor Salvador Peniche Camps and researcher José Carlos Mireles Prado from the University of Nuevo León, was originally a mining and agricultural center and up until a few years ago, it had agriculture and livestock production and, in some areas, it was a textile and footwear production center. Today, it headquarters automotive assembly plants. Nissan started in Aguascalientes in 1982 and General Motors came to Silao in 1995, and from there onwards many other assembly plants have established in the region: Honda, Volkswagen and Mazda in Guanajuato, GMC and Koito Manufacturing in San Luis Potosí and Bombardier, Hitachi and Eurocopter in Querétaro, to name a few.
Seven out of the twenty-one automotive assembly plants that operate in Mexico have headquarters in the Bajío region: General Motors, Honda, BMW, Nissan, Volkswagen, Mazda and Toyota.
The automotive cluster located in Bajío is considered the most dynamic in Latin America and the most productive in Mexico. According to the Automotive Industry Record from the National Institute of Statistics and Geography (INEGI), between January and June 2023, assembly plants in the region produced 1,022,605 light vehicles. The assembly plants with the highest production in the region are: General Motors Silao (174,036 units), Nissan A1 (176,118 units) and General Motors SLP (155,384 units). These figures include the states of Aguascalientes, Guanajuato and San Luis Potosí, according to data from the sector’s Automotive Directory platform.
Moreover, the platform mentions that production in Bajío will hit 1,715,054 units by the end of the year, up by 18.02 per cent compared to 2022 when production hit 1,452,766 units.
The Bajío, previously considered Mexico’s granary region, is crucial for the Mexican economy as it constitutes one of the most important industrial corridors in the country and is home to 14.5 million people, says the organization México, ¿cómo vamos?
Numbers from the Secretariat of Economy reveal that between January and September 2022, Aguascalientes, Guanajuato, Querétaro and San Luis Potosí received USD2,700 million of foreign direct investment, nine per cent up from the same period in 2021. Seventy-one per cent of this went to manufacturing, nine per cent up from the same period the year before. Guanajuato received the most foreign direct investment for manufacturing (44 per cent), followed by San Luis Potosí (20 per cent) and Aguascalientes (18 per cent).
According to information from the Secrertariat of Economy, the states that received the most foreign direct investment during the first six months of 2023 were: Jalisco, Baja California and Estado de Mexico at five per cent (1.39 billion dollars), followed by Nuevo León (five per cent) and Mexico City (35 per cent).
In terms of jobs, the online Center for Careers OCCMundial reports that between January and June 2023 there were 43,572 new job offers, up by seven per cent compared to the same period in 2022.
The number of job seekers using occ.com.mx in the Bajío region (Aguascalientes, Guanajuato, Querétaro and San Luis Potosí) adds up to 1,471,721 people. “There are more jobs available now because the Bajío Industrial Corridor has experienced significant growth due to nearshoring, and it has become the most dynamic industrial region in Mexico and a national and international investment magnet,” mentions the OCCMundial report.
The report points out that Querétaro is the State that generated the most jobs during the first six months of 2023, with 20,416 new jobs posted on occ.com.mx, which accounts for 47 per cent of the total job market for the region, followed by Guanajuato (32 per cent), San Luis Potosí (14 per cent) and Aguascalientes (seven per cent). The economic sector that generated the most jobs was manufacturing, with 38 per cent of the total jobs advertised for the region.
“Seven out of the twenty-one automotive assembly plants that operate in Mexico have headquarters in the Bajío region: General Motors, Honda, BMW, Nissan, Volkswagen, Mazda and Toyota.”
Industrial real estate in Bajío
Nearshoring has been happening in Mexico for decades and it is defined as the process in which companies relocate their operation to this country to be closer to their main market, the United States of America.
Nearshoring creates efficiencies in supply chains and is beneficial for both countries.
Companies seek to have shorter and more resilient supply chains, while avoiding geopolitical risks and Mexico is in a privileged location to serve the North American market. “The trend is clear and companies are relocating from Asia to Mexico. Examples of this are Boeing, GM, Honda, Nucor, Oster, Samsung, Mattel and Black & Decker, which have brought to Mexico over USD3 billion in annual production.
Sixty-one per cent of the total nearshoring activity took place in Monterrey and Saltillo,” according to a recent analysis by Citibanamex.
The analysis also mentions that industrial real estate has adjusted and there is a five per cent average availability across the country. However, there are places like Tijuana which have zero-percent availability rate due to physical barriers like the ocean and the US border.
It is expected that the investment that nearshoring has brought to the US-Mexico border region will make its way to the Bajío region, particularly to the automotive cluster in San Luis Potosí and Guanajuato. It is also expected that Querétaro will continue to have demand for logistics services and the light manufacturing industry will continue to diversify there.
Over the last few years, companies located in Bajío have expanded; Guanajuato and Querétaro have taken the lead in demand for industrial land. At the end of the first quarter in 2023, both states combined accounted for more than 69 per cent of the net absorption rate, equivalent to almost 87,000 square meters split between light manufacturing and logistics services. San Luis Potosí mostly has businesses that seek to buy industrial land to develop their own buildings and Aguascalientes has seen business expansion and registered tenant movement, which increased its vacancy rate by 3.8 per cent, according to the Bajío Industrial Real Estate Market Report by CBRE Mexico.
The report indicates that speculative development projects will reactivate over the next few months, mainly in Querétaro, which accounts for more than half of the construction projects in the region. The report also anticipates that commercial activity will increase during 2023 as there are businesses in the region which have already announced expansions and new investments.
The first quarter of 2023 closed with just over 450,000 square meters of construction projects, out of which 54 per cent were built to suit and have already been pre-leased. The reactivation of construction projects in the region is expected to give continuity to the expansion of logistics companies that came because of the pandemic. It is expected that light manufacturing and automotive will demand industrial real estate as the logistic services, infrastructure and highly-skilled labor available will be attractive for them.
