Automotive opportunities in Mexico

An Expert's View about Automobile in Mexico

Posted on: 2 Sep 2010

Latest overview of market potential for the automotive sector in Mexico.

Sector Briefing Automotive Opportunities in Mexico Why Mexico? The automotive industry designs, develops, manufactures, markets, and sells motor th vehicles. Mexico is the 11 largest automotive producer in the world, accounting for approximately 2% of world production. The country currently produces slightly more than 2 million vehicles annually. Mexico Offers a Very Attractive Business Environment. ? One of the lowest country risks. ? Low costs. ? Provider of outsourcing services and manufactured products. ? Qualified staff. ? Automotive companies. ?Mexico is a major player in the ? A network of free trade agreements (i.e. NAFTA). Mexico is an export platform to 3 global automotive industry. But continents and it offers preferential trade Mexico is short of many of the access to more than one billion consumers in essential component suppliers more than 40 countries. needed to support such a large Find general information on the Mexican m anufacturing operation. It is in market conditions on UKTI?s website. The the supply of components that the Doing Business Guide for Mexico gives an greatest opportunities for UK overview of Mexico?s economy, business culture, potential opportunities and an companies exist.? introduction to other relevant issues. UK Trade & Investment Sector Briefing: Automotive Opportunities in Mexico ? Interior trims and light weight alternative Opportunities metals. Major investments by the major In Mexico, there are over 1,000 suppliers in automakers and new free-trade activity the automotive industry, 560 of which are are triggering the expansion. Automobile Tier1 and 500 are Tier2 suppliers. suppliers now see Mexico as a viable production centre for all of North America. There is a high concentration of automotive suppliers in mid and north western Mexico. Mexico has become an even more attractive opportunity for investment because the plants Opportunities for Tier 1 & 2 located in the country cover the rules of origin There is a significant demand for raw materials within NAFTA, for Europe as well as having used in the manufacture of spare parts and preferential export arrangements with other components: regions, especially South and Central America. ? OEM parts & components. Mexico's multiple trade agreements, which are ? Hybrid vehicle components. with nations that in aggregate represent 60 per ? Materials. cent of the world's trade volume, are providing ? Stampings. automotive manufacturers in Mexico with ? Electronic components. increased flexibility and cost savings when ? Equipment and specialised tooling. trading goods in and out of Mexico, the United States, the EU and its other trade partners. High Technology Mexico's network of free trade agreements Key opportunities in which the UK has (FTAs) has become a powerful incentive for experience include high tech components and leading auto producers to establish operations the mainstream application of motor sport in the country. Mexican content in automotive technology and high-end manufacturing and products is the key to access 32 markets in design automotive engineering. three continents with 680 million consumers, Opportunities to supply the automotive after under preferential conditions. market continue to exist with an increasing emphasis on high technology. There are no major barriers to the importation of spare parts and equipment Market Prospects if they comply with a NAFTA Certificate of There is excellent market potential for Origin. exporters in the aftermarket sector: electrical systems, panels, windshield wipers, The auto parts sector in Mexico consists of transmission and engine assembly. approximately 1,100 companies where 70 percent are foreign capital companies while 30 Other key aftermarket products include: percent remain national. From this total, 350 ? Rims. produce first tier products while the remainder ? Stereo and CD/radio equipment. supply raw materials to second and third tier ? Alarm and security systems. suppliers. ? Special shock absorbers. Companies present in Mexico in the light ? Rims. vehicle category are: VW, Ford, GM, Chrysler, ? Tail lights. Honda, Nissan, BMW and Toyota. ? Floor mats. Components- Strong Demand Automotive chemicals such as: Engineered parts for diagnostic and assembly ? Waxes. equipment: ? Cleaners and additives. ? Braking systems. ? Paint restoration kits. ? Electrical components. ? Transmission and engine components. Pick-up truck accessories and automotive tools ? Moulded plastic sections. and boxes as well as collision repair parts, ? Stamped steel parts steering assemblies. catalytic converters, steering wheels and sound UK Trade & Investment Sector Briefing: Automotive Opportunities in Mexico systems and generally most types of It is highly recommended to take part in trade accessories. fairs and exhibitions. They are good tools to approach the market. At the end of this report you will find a list of the major exhibitions Additional prospects for auto parts are: related to the automotive sector in Mexico. ? Products related to tune ups. ? Brakes and other general services. ? A/C parts. If you have any questions on the opportunities ? Engine, steering and suspension parts. above, contact the UKTI contacts named in this ? Electric and electronic components. report. Business opportunities aimed specifically at UK companies are added daily to Concerning manufacturing in the UKTI?s website. These leads are sourced by our automotive sector, Mexico has a staff overseas in British Embassies, High competitive disadvantage in the Commissions and Consulates, across all sectors production of certain materials, and in over 100 markets. particularly steel plates, plastic resins and any materials that require high-tech You can be alerted to business opportunities on processes. a regular basis by registering on the UKTI website. Find out more on UKTI?s business The state-of-the-art manufacturing facilities opportunities service on the UKTI website established in Northern and Central Mexico have contributed to the modernisation of the sector and regional development. Highly specialised clusters have also been developed around the major auto industrial plants through the establishment of hundreds of new suppliers that promote vertical integration and strengthen supply chains. Nowadays, Mexico's automotive sector is transiting towards a new stage in developing sophisticated industrial processes. The opening of advanced research centres to provide technological innovations and automotive designs has been possible thanks to the high- skilled labour force graduating from engineering programmes at Mexican technology institutes. Firms such as General Motors, Nissan, Volkswagen and Delphi have developed a capability of improving and creating new processes and products. The auto and auto-part industry has played a vital role in Mexico's economy, with its 19% share in total exports, 24% of the country's manufacturing GDP, and employing more than 1.9 million people. It is now serving as the engine for increasing economic activity and providing prosperity. Mexico is currently eleventh in the world in automotive production, and even though there is a general economic slowdown, Mexico is projected to rank fifth in 2011, competing with stronger economies such as India, the United States, China and Slovakia. UK Trade & Investment Sector Briefing: Automotive Opportunities in Mexico Major events and activities UKTI contacts PAACE AUTOMECHANIKA Jonathan C. Clare Contact: Eugenio Carrillo Consul Email: British Consulate Monterrey Time: July 2010 Tel: +52 (81) 8356 5359 Email: INTERNATIONAL CONGRESS OF THE AUTOMOTIVE INDUSTRY IN MEXICO Itzel Hernández Contact: Ángela Soto Vázquez Trade and Investment Officer Email:, British Consulate Monterrey Time: July 2010 Tel: +52 (81) 8356 5359 Email: EXPO INTERNACIONAL RUJAC Automotive-Parts and Spare Equipment Alejandra Rodriguez Contact: Mónica Díaz F. Trade and Investment Officer Email: British Consulate Monterrey Time: September 2010 Tel: +52 (81) 8356 5359 Email: EXPOTRANSPORTE ANPACT- Transportation Industry Dario Ochoa Contact: Arturo Massuttier Trade and Investment Officer Email: British Consulate Monterrey Time: November 2010 Tel: +52 (81) 8356 5359 Email: TECMA Contact: Juan Pablo Vázquez Enciso Email:, Time: March 2011 Find full details of all events in this country and sector on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis. UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector Briefing: Automotive Opportunities in Mexico Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Mexican market are advised to you to meet contacts and promote your undertake as much market research and company in the Mexican market planning as possible in the UK. UKTI?s team in Mexico with its wide local knowledge and This work is available via our Overseas Market experience can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Mexican market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector Briefing: Automotive Opportunities in Mexico
Posted: 02 September 2010

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