Mexico City — Sunday’s elections in the states of Mexico and Coahuila could bring an end to almost a century of rule by the Institutional Revolutionary Party (PRI) as the ruling Morena party of President Andrés Manuel López Obrador seeks to wrest control of the states that together contribute 12.8% to Mexico’s gross domestic product (GDP).
The two states are industrial powerhouses that are among the top 10 states in terms of GDP contribution, and will play a key role in the future of the electric vehicle industry in the country, and which contribute 21.4% of vehicle production in Mexico, and are home to plants of vehicle giants Stellantis, General Motors and Ford.
The economic weight of Edomex and Coahuila
Mexico state (Edomex) has a population of 17,401,804 inhabitants (13.5% of the country’s total population), which makes it the most populated state in Mexico, although in extension it barely represents 1.1% of the national territory, according to data from the country’s statistics bureau INEGI.
Coahuila has a population of 3,286,969 inhabitants (2.5% of the total), but its territory is much larger, accounting for 7.7% of the national territory.
The economies of Edomex and Coahuila both grew 5.9% during 2021, according to INEGI. The state of Mexico contributes 9.1% to the national GDP, making it the second largest contributor to Mexico’s GDP, behind only Mexico City.
Coahuila contributes 3.7% to the national GDP, ranking eighth out of the 32 states in the country, above Chihuahua, Puebla, Tamaulipas and Querétaro, and which have a significant manufacturing industry linked to exports to the United States.
Likewise, Edomex and Coahuila registered the same level of unemployment of 1.6% in the first quarter of 2023, according to INEGI data.
The sector of activity that contributes the most to Coahuila’s state economy is manufacturing industries and the production of machinery and equipment, while in Edomex, commerce is the sector that contributes the most to the state’s GDP.
Based on INEGI’s Quarterly Indicator of State Economic Activity (ITAEE), in the fourth quarter of 2022, both the state of Mexico and Coahuila showed positive annual economic growth. In the fourth quarter of 2022, the state of Mexico grew 2.7% annually and Coahuila grew 3.1% annually, that is, compared to the same quarter of the previous year.
However, the think tank México ¿Cómo vamos? states that neither of the two states met their 4.5% growth goal, and need to generate higher rates of sustained growth to achieve social and economic development.
Both states have already recovered their pre-pandemic economic activity. The economic downturn was deeper in Coahuila, but it is currently showing a faster rate of recovery than the state of Mexico.
Coahuila is 2.2% above its pre-pandemic level (first quarter 2020), while the state of Mexico is 1.9% above its pre-pandemic level.
Vehicle production hubs
Edomex and Coahuila are home to light vehicle manufacturing plants of Stellantis, General Motors and Ford, and together they are a fundamental part of the energy transition with the production of electric cars.
Edomex has an annual production capacity of 517,920 vehicles, while Coahuila’s is 564,400 vehicles, according to data from the Mexican Automotive Industry Association (AMIA).
At the end of 2022, Carlos Zarlenga, president of Stellantis Mexico, said there is no other emerging country with an opportunity from nearshoring like Mexico.
“Mexico will become the motor of the US electric car industry,” he said.
General Motors will produce only electric cars at its plant in Ramos Arizpe, Coahuila, Mexico’s Economy Minister Raquel Buenrostro said at the beginning of the year, adding that the automaker plans to launch more than 30 electric vehicles worldwide from 2022 to 2025.
The company’s plant in Ramos Arizpe began adapting to produce only electric cars in 2022.
And just 58km away is the location where Tesla’s first plant in Mexico and Latin America will be built, which will boost this region as a leader in electric vehicle production.
The candidates’ proposals
During the electoral campaigns, promises to end insecurity and corruption won the spotlight over the economic proposals presented by the candidates, despite the fact that the two states have such economic weight and are key players in the automotive industry.
In the state of Mexico, the two candidates are Alejandra del Moral for a coalition comprised of the National Action (PAN), the PRI, the Democratic Revolution (PRD) and New Alliance (Nueva Alianza) parties, and Delfina Gómez for the common candidacy Juntos Haremos Historia, formed by Morena, the Workers’ Party (PT) and the Green Party (PVEM).
Whatever the result, the state of Mexico will have for the first time a female governor for the next six years.
In Coahuila there are four candidates: Lenin Perez of the PVEM-UDC, Manolo Jimenez of the PAN-PRI-PRD, Ricardo Mejia of the PT and Armando Guadiana of Morena.
In the proposals that the candidates registered before the state electoral institutes, most candidates did not mention an economic growth objective, nor did they make explicit reference to the electric vehicle boom.
Of the six candidates, only Manolo Jimenez included in his proposals published on the state electoral institute’s website the capitalization of nearshoring and economic operation offices to attract national and foreign investment in Coahuila.
Lenin Perez, Ricardo Mejia and Armando Guadiana proposed the creation of employment, scholarships and social programs to improve the economy of families and the employability of young people.
For his part, Armando Guadiana has promised that Coahuila will become the “Silicon Valley” of Mexico by attracting more technology companies.
Delfina Gómez has proposed turning the state of Mexico into an economic engine to support the generation of jobs, competitiveness and the development of small and medium-sized enterprises, she also promised to reduce bureaucracy by simplifying procedures and eliminating intermediaries,
“This will avoid corruption and we will become the industrial logistics center of the country to take advantage of the Felipe Ángeles airport (AIFA),” she said.
Alejandra del Moral proposed to strengthen the state’s advantage as a logistics hub by attracting foreign and local investment, as well as taking advantage of the state’s vocations such as tourism, the countryside and the automotive industry.