Automotive opportunities

An Expert's View about Automobile Assembly in Mexico

Last updated: 19 Mar 2011

Mexico is one of the ten largest automobile, truck, auto-parts and components manufacturers in the world.

Sector briefing Automotive opportunities in Mexico Why Mexico? Mexico is one of the ten largest automobile, truck, auto-parts and components manufacturers in the world. The Mexican industry exports 75% of its production. In Mexico companies manufacture: ? Passenger vehicles. ? Commercial vehicles. ? Parts and components for original equipment. ? And spare parts. The automotive industry is comprised of: ? 8 light vehicle manufacturers. ? 12 heavy vehicle manufacturers. ? 1,100 auto parts manufacturer. You can find general information on the Mexico Offers a Very Attractive Business Mexican market conditions on UKTI?s website. Environment. The Doing Business Guide for Mexico gives an ? One of the lowest country risks. overview of Mexico?s economy, business ? Low costs. culture, potential opportunities and an ? Provider of outsourcing services and introduction to other relevant issues. manufactured products. ? Qualified staff. ?The US$ 4.5 Billion ? Automotive companies. Investment to manufacture ? Mexico has signed 12 trade agreements and the new Ford Fiesta in Mexico treaties with 44 countries, which represent 15 percent of the world?s population. In addition, positions Mexico as a the Mexican legal and political systems favour potential producer of global the development of new businesses and offer a cars.? safe legal environment for investment. UK Trade & Investment Sector briefing: Automotive opportunities in Mexico Opportunities There is a high concentration of automotive suppliers in mid and north western Mexico. Major investments by key automakers and new free-trade activity are triggering the Opportunities for Tier 1 & 2 expansion. Automobile suppliers now see There is a significant demand for raw materials Mexico as a viable production centre for used in the manufacture of the following spare the whole of North America. parts and components: ? OEM parts & components. Mexico has become an even more attractive ? Hybrid vehicle components. opportunity for investment because the plants ? Materials. located in the country cover the rules of origin ? Stampings. within NAFTA and for Europe as well as having ? Electronic components. preferential export arrangements with other ? Equipment and specialised tooling. regions, in particular South and Central America. Mexico's multiple trade agreements, High Technology which are with nations that in aggregate Key opportunities in which the UK has represent 60 per cent of the world's trade experience include: volume, are providing automotive ? High tech components. manufacturers in Mexico with increased ? Application of motor sport technology. flexibility and cost savings when trading goods ? High-end manufacturing and design in and out of Mexico, with the United States, automotive engineering. the EU and its other trade partners. Technologies related to hybrids will have Mexico's network of Free Trade Agreements better opportunities in Mexico. Hybrids (FTAs) has become a powerful incentive for are expected to account for 10% of leading auto producers to establish operations Mexico´s fleet by 2018. in the country. Mexican content in automotive products is the key to accessing 32 markets in Market Prospects three continents with 680 million consumers, There is excellent market potential for under preferential conditions. 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 and 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. Global assembly plants are being relocated to Mexico. Pick-up truck accessories and automotive tools and boxes as well as collision repair parts, High demand components. catalytic converters, steering wheels and sound Engineered parts for diagnostic and assembly systems and generally most types of equipment: accessories. ? Braking systems. ? Electrical components. Regarding manufacturing in the ? Transmission and engine components. automotive sector, Mexico has a ? Stamped steel parts steering assemblies. competitive disadvantage in the ? Interior trims and light weight alternative production of certain materials, metals. particularly steel plates, plastic resins and any material that requires high-tech In Mexico, there are over 1,000 suppliers in processes. the automotive industry, 560 of which are Tier1 and 500 are Tier2 suppliers. UK Trade & Investment Sector briefing: Automotive opportunities in Mexico The state-of-the-art manufacturing facilities established in Northern and Central Mexico have contributed to the modernisation of the sector and to 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. 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 one of the ten largest automotive manufacturers in the world. Mexico is projected to rank fifth in 2011, competing with stronger economies such as India, the United States, China and Slovakia. It is highly recommended to take part in trade fairs and exhibitions. They are good tools with which to approach the market. At the end of this report you will find a list of the major exhibitions related to the automotive sector in Mexico. If you have any questions regarding the opportunities above, please contact the UKTI contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can be alerted to business opportunities on a regular basis by registering on the UKTI website. Find out more on UKTI?s business opportunities service on the UKTI website UK Trade & Investment Sector briefing: Automotive opportunities in Mexico Major events and activities UKTI contacts CIIAM 2011 & Expo-INA Jonathan C. Clare INTERNATIONAL CONGRESS OF THE Consul AUTOMOTIVE INDUSTRY IN MEXICO British Consulate Monterrey Contact: Alejandro Moreno. Tel: +52 (81) 8356 5359 Email: amoreno@ina.com.mx, Email: jclare@ukconsulate.org Time: April 4-8 2011 www.ukti.gov.uk www.ina.com.mx Itzel Hernández TECMA Trade and Investment Officer Contact: Juan Pablo Vázquez Enciso British Consulate Monterrey Email: jpvazquez@tecma.org.mx, Tel: +52 (81) 8356 5359 info@tecma.org.mx Email: ihernandez@ukconsulate.org Time: March 8 to 11, 2011 www.ukti.gov.uk www.tecma.org.mx Alejandra Rodriguez Expo Proveedores del Transporte 2011 Trade and Investment Officer Contact: J&D Organización de eventos British Consulate Monterrey Email: info@expoproveedores.com.mx Tel: +52 (81) 8356 5359 Time: May 18 to 20, 2011 Email: arodriguez@ukconsulate.org www.expoproveedores.com.mx www.ukti.gov.uk PAACE AUTOMECHANIKA Dario Ochoa Contact: Kristen Woodburn Trade and Investment Officer Email: British Consulate Monterrey kristen.woodburn@usa.messefrankfurt.com Tel: +52 (81) 8356 5359 Time: July 13-15, 2011 Email: dochoa@ukconsulate.org www.paaceautomechanika.com www.ukti.gov.uk EXPO INTERNACIONAL RUJAC Automotive-Parts and Spare Equipment Contact: Mónica Díaz F. Email: mercadotecnia@rujac.com.mx Time: September 7 to 9, 2011 www.rujac.com.mx Mexico Now- Autoindustry Conference Email: information@mexico-now.comTime: September 2011 www.mexico-now.com 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 2011 by UK Trade & Investment. Crown Copyright © Published 2011 by UK Trade & Investment. ©Crown Copyright 2011 You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000. UK Trade & Investment Sector briefing: Automotive opportunities in Mexico
Posted: 19 March 2011, last updated 19 March 2011