Mexico may receive as much as $20 billion in foreign direct investment this year, 11 percent more than a prior forecast, as the second-biggest Latin American economy’s low wages and proximity to the U.S. draw producers.
Mexico has manufacturing costs 25 percent lower than the U.S., is producing more engineers than other countries and is signing free trade pacts with nations like Colombia, Ferrari said. The expected $20 billion compares to $18 billion estimated earlier this year by Finance Minister Ernesto Cordero.
In the past year, Mexico has attracted auto manufacturers like Volkswagen AG (VOW), Nissan Motor Co., Mazda Motor Co. and General Motors Co. (GM) to announce investments in the country of more than $400 million each.
Honda Motor Co., Japan’s third-largest automaker, said on Aug. 12 it plans to build an $800 million factory in the central Mexican city of Celaya.
“We’re expecting to have more of those announcements before the year’s end,” Ferrari said, declining to identify the auto manufacturers that may open factories in Mexico.