The automotive components sector has performed steadily as a generator of crossborder greenfield investment in recent years, with project numbers and capital investment fluctuating very little since 2011. According to greenfield investment monitor fDi Markets, global project numbers were down slightly in 2015 – to 502, compared with 518 a year previous – but estimated capital expenditure increased to $22.9bn from $18.1bn.
The US has attracted the largest number of auto components FDI projects (510) in the period between the start of 2011 and the end of 2015, but neighbouring Mexico has mopped up the most capital investment in dollar terms – $20.2bn compared with the US’s $18.3bn. China is in the middle, coming second to the US in terms of project numbers and third after Mexico and the US for capital investment.
In the driving seat
Two Chinese cities have bypassed their Mexican competitors though, with Chongqing and Shanghai having attracted more capital investment than Mexico’s top-ranked city, Chihuahua, in the past five years. The Mexican cities of San Luis Potosi and Silao round out the list of top five destination cities worldwide for auto components. Among states and provinces, Mexico’s Guanajuato comes out on top, beating Michigan (US), Jiangsu (China), Chihuahua (Mexico) and Tennessee (US). Three of the top 10 states are Mexican, three are Chinese and three American.
It appears these three destination countries have a strong lock on FDI competitiveness for auto components. Among the other countries seeing success in this space are India, Germany, the UK, Romania, the Czech Republic and Thailand.
The largest generator of crossborder investment activity in the auto components sector is Japan, which has contributed the highest number of projects (669) and volume of investment ($28.2bn) of any country globally since 2011. Other major source countries include Germany, the US, France and Canada.
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