The woes of Michigan’s car industry, lying as it does at the heart of the US auto industry which teetered on the brink of collapse only a few years ago, have been well documented. But the state remains a world-beater for investment in the sector, attracting more FDI projects from automotive original equipment manufacturers (OEMs) and automotive component suppliers than any other state or region in the world over the past year.
According to fDi Markets, a crossborder investment tracking service affiliated with fDi Magazine, Michigan attracted 34 greenfield FDI projects from automotive OEMs and suppliers between January 2014 and June 2015, ahead of Jiangsu in China and Coahuila in Mexico. However, the project amounts are relatively small, as the state ranks only number 15 in the list of top states for capital expenditure. The Canadian province of Ontario received the largest amount of capex on such projects in the same time period, at nearly $4bn, followed by the province of Catalonia in Spain ($2.8bn) and China’s Zhejiang ($2.5bn).
Meanwhile, Chinese cities are now the most competitive in the sector, taking the top four slots in the global list of cities measured by number of projects, and five of the top 10 when measured by capex. Shanghai ranks first in the world for projects and Ningbo for capex.
At the country level, the US, China and Mexico are fighting for automotive FDI supremacy, with the US ranking first by projects, China first by capex and Mexico ranking third and second, respectively, by these measures. Mexico is becoming increasingly competitive in the sector now the wage gap is closing with China and is therefore seeing a boost to its cost competitiveness.
Within Mexico, the state of Coahuila is seeing the most traction, ranking third globally among states for number of projects and fifth by capex. Coahuila attracted 22 projects between January 2014 and June 2015 for a total of an estimated $2.3bn. Other Mexican states faring well for auto investment are Guanajuato, Nuevo Leon, Queretaro and Chihuahua.