Andreas Hinrich
CEO
Volkswagen
/
Insight

50 Years of Evolving with Mexican Automotive Dreams

Mon, 09/01/2014 - 10:00

Few car companies have been part of the tapestry of the Mexican automotive industry as much as Volkswagen. Its flagship vehicle, the Volkswagen Beetle, remains one of the most evocative cars in the country decades after its launch in Mexico. Known as “Vocho” or “Vochito”, the Beetle has been part of the lives of many Mexican families that found it a reliable yet economic car. This sentimental attachment to the Beetle was addressed by Ildefonso Guajardo, Mexico’s Minister of Economy, during the celebration to mark the 60th anniversary of Volkswagen doing business in Mexico and 50 years since the creation of Volkswagen de México. Guajuardo referenced the 1970s, a decade during which “the Vochito was the first car of many young professionals. The personal story that many Mexicans have with Volkswagen is reflected in the great story that the company has built alongside the Mexican economy,” he stated.

When the company arrived to Mexico in 1964, it was unsure of what the real opportunities in the market would be. “Volkswagen found in Mexico a fertile land within the closed economy that the country had at the time. Back then, the challenges were hard since the only true incentive was the growing domestic market as opportunities for internationalization were scarce,” explains Guajardo. However, over the years, Mexican economic policy changed toward turning the country into a free market economy. Mexico has signed international agreements with 45 countries such as NAFTA or GATT. “This has allowed the automotive industry to plan its production facilities in Mexico to export vehicles to other regions, which has transformed the Mexican industry,” explains Guajardo. According to AMIA, from January to May 2014, Mexico produced 287,488 cars compared to the 255,474 units made in the same period in 2013. In that same year, 191,205 vehicles were exported from January to May, compared to 234,629 vehicles over the same time in 2014. These figures show a growth of the automotive industry in the last year with 12.5% in production and 22.7% in exports. The foreign exchange generated by the automotive industry is now bigger than coming from the oil and gas sector. As Mexico has evolved, so has Volkswagen. The celebration came with the announcement that Volkswagen’s plant in Puebla would produce the Golf VII, a car that CEO of Volkswagen de México, Andreas Hinrichs, refers to as representing the essence of Volkswagen. “Volkswagen de México has a promising future now that the production of the Golf VII is on its way, while other members of the Golf family are soon to follow,” explains Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG. “No other car apart from the Golf has its own automobile class, no car similar to the Golf has the technological advancements that the new Golf has. The Golf VII not only looks good, it also has more innovation than before. The new generation of engines offers the entire spectrum of alternative drives. The Golf VII marks the start of a new era for the world and for the Volkswagen brand in North America.”

According to Hinrichs, this success in Mexico today is proof that Volkswagen was strengthened here as the local automotive industry grew. “Since 1974, Volkswagen has manufactured 10 million cars and 11 million engines in Mexico. Puebla is the fifth-largest Volkswagen factory outside Europe and ships products to all the markets where we are present,” explains Hinrichs. But the assembled dignitaries were quick to add that Volkswagen’s influence in Mexico went beyond mere economic contributions. “The impact of the company could also be measured in more than three generations of men and women who have contributed to the development of the state of Puebla where the company began operations 50 years ago,” states Rafael Moreno Valle, Governor of Puebla. “Many German workers and former workers of Volkswagen Puebla have decided to stay in Mexico and make the country their home. The contribution of the German community to the cultural, economic, social, and academic life of Puebla has been of utmost importance.”

50 years after the company first opened its doors here, it seeks to remain a bastion of economic growth and employment, a fact brought home by Winterkorn announcing a new investment. “We are satisfied with the ambitious government here, which is why Volkswagen stands firm by its side and by the side of its plants and team in Mexico,” he stated. As a sign of commitment, Volkswagen will invest US$7 billion in the North American market until 2018, of which a large part will be destined to Mexico to continue its shared success story with Mexico for the next 50 years.