Mexico Reports Record First-Quarter Auto Production

April 8, 2014

iStock_000008876270MediumThe Wall Street Journal, 4/7/14

Mexico produced a record number of cars and light trucks in the first quarter of the year, with exports rising to an all-time high thanks to a recovery in U.S. demand after a harsh winter, an industry trade group said Monday. The Mexican Auto Industry Association, or AMIA, said Mexico produced 774,731 light vehicles in the first three months of the year, a 6.5% increase from the same period of 2013. March output rose 16% from the year-earlier month.

The unprecedented first-quarter output follows four consecutive years of record production in cars and light trucks, which reached almost three million units in 2013. Auto exports also set a record in the first quarter, rising 8.6% to 606,204 vehicles, with March shipments up 13% from a year before. Exports to the U.S., Canada and Latin America rose, while exports to Europe and Africa fell, according to the industry group.

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Mexico becoming a driving force in auto production

February 25, 2014

iStock_000008876270MediumLA Times, 2/24/14

The first Honda Fit rolled off the assembly line Friday at a new $800-million factory near Celaya, Mexico, a symbol of the growing might of the country’s auto industry.Honda’s U.S. factories spit out hundreds of thousands of Accords and Civics each year. But when the automaker redesigned the Fit for North America, it turned to Mexico for an increasingly skilled workforce and favorable export rules.

Mexico already accounts for about 18% of North American auto production, but that’s expected to jump to 25% by 2020 as automakers pour billion of dollars into factories, said Joe Langley, an analyst at IHS Automotive. The nation has joined Germany, Japan and the U.S as one of the heavyweights of auto production, he said.

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US Energy Companies Poised to Benefit from Mexico Energy Reform

February 4, 2014

energy - oil barrelsRigzone, 1/30/14

Mexico’s energy reforms will create “abundant opportunities” for U.S. energy companies and shrink the socioeconomic disparities between Texas’ booming metro areas and its border cities, according to the latest BBVA Compass research. “The 2013 reform promises to create abundant opportunities for private companies that have the technology and expertise to revive Mexico’s hydrocarbons and electricity industries,” BBVA Compass economist Marcial Nava wrote in his report on the reforms.

Under the reform, the state would retain ownership of hydrocarbons beneath the surface and Petroleos Mexicanos (PEMEX) and Comision Federal de Electricidad (CFE) would not be privatized. However, the new legal framework would allow the ownership of hydrocarbons at the wellhead through profit-sharing, production sharing and license sharing contracts. BBVA Compass estimates that the reform could increase private direct investment inflows into Mexico by $20 billion to $30 billion per year, or 1.5 to 2.3 percent of Mexico’s gross domestic product. While secondary laws are still needed to translate the reforms into a workable framework and legal processes, U.S. oilfield services, shale gas and infrastructure companies, among others, stand to benefit from the reforms, Nava said in the Jan. 22 report.

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Mexico’s Vigilantes on the March

February 3, 2014

federal police mexicoThe New York Times, 2/3/14

In the past, Mexico’s revolutions and internal wars have all been eruptions stemming from deep social problems. They unleashed enormous destructive power and took decades to run their course. But they were always followed by long periods of peace and economic development. The country’s present social unrest has a different source and is of a different nature. If the sweeping economic reforms of 2013 attract investment and are implemented efficiently and honestly (two bigs ifs), the major remaining obstacles to real social progress will be the powerful force of organized crime and the weakness of legal and practical measures to stem it.

Since democracy came to Mexico in 2000, the country has sunk into a cycle of violence fed by intense criminality. Images circulating on social media starkly depict its horrific cruelty. It is true that narco cartels and other organized crime groups (with allies in high political positions) have grown vastly stronger since the 1970s. But no one foresaw the paradoxical cause of their huge expansion: the limits set by democracy on the formerly near-dictatorial power of the president.

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Mexico energy reform could bring $1.2 trillion to border towns

January 29, 2014

pipeline and guageFuelFix, 1/28/14

As Mexico moves to open its energy sector to international companies, the new investments and increased activity could mean a bonanza for  border towns on both sides, attracting as much as $1.2 trillion in economic activity to the region in the next decade, according to a BBVA Compass economist.

The Mexican energy reforms are a series a series of constitutional changes passe din December that ends the monopoly of Mexican oil company Pemex and opens all segments of the energy sector to private firms.  Mexico’s congress currently is debating the supporting rules that will provide key information on how the new policy will be implemented and regulated.

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Mexico’s gay rights movement gaining ground

January 28, 2014

shutterstock_89005363Aljazeera, 1/28/14

Intolerance of sexual diversity remains common across much of Mexico and Latin America, a strongly Catholic region where macho attitudes prevail. Yet the region has seen rapid change in recent years. Democratization, an increased respect for human rights, the onset of globalization and the growth of social media have all facilitated the expansion of lesbian, gay, bisexual, transgender and queer (LGBTQ) rights across the region. Argentina legalized same-sex marriage in 2010, and Brazil and Uruguay followed suit in 2013. The three countries are the only ones in Latin America to be named among the top 30 most gay-friendly nations in the world, as determined by LGBT travel website Spartacus World.

Mexico, meanwhile, is in the middle of a radical transformation. In 2009, Mexico City became the first Latin American jurisdiction to legalize marriage and adoption by same-sex couples, but the rest of the country is still playing catch-up with the liberal capital. A 2010 Supreme Court ruling means marriages registered in Mexico City are recognized everywhere, but same-sex ceremonies remain outlawed in most of the country and only a limited number have been allowed in five of Mexico’s 31 states.

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Operators await details as Mexico implements energy reforms

January 28, 2014

Energy -electricity_transmission_linesOil & Gas Journal, 1/27/14

International oil and gas companies keenly await more details as Mexico’s Congress drafts and debates secondary laws to implement its recently passed energy reforms. Opinions vary on whether Mexico can meet the deadlines it scheduled for secondary laws and the creation of various regulatory groups. On Dec. 21, 2013, Mexico’s sweeping energy reform became law, representing the most significant overhaul of Mexico’s oil, gas, and electric industries since 1938. Many ambiguities have yet to be resolved, various energy attorneys and consultants told Oil & Gas Journal.

Secondary legislation will stipulate contract logistics and tax reforms as Mexico ends the state-owned monopolies of oil company Petroleos Mexicanos (Pemex) and electric company Comision Federal de Electricidad (CFE). Companies outside Pemex are to be allowed to participate in exploration and production activities, breaking the decades-old Pemex monopoly. The reforms also will allow direct private investment in Mexico’s midstream and downstream.

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