ARMANDO CORTÉS
Executive Director for Industrial Development
ProMéxico
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EVOLVING TO PARTICIPATE IN A TECH-DRIVEN INDUSTRY

Sat, 09/01/2018 - 10:58

Q: How can Mexican companies increase their participation in foreign markets and boost exports of Mexican-designed technology?

A: Mexico’s domestic market is highly dynamic. Automotive OEMs and several key aerospace and electronics companies already have a good demand base that will enable local companies to insert themselves into those value chains. SMEs are usually integrated into value chains as Tier 3 suppliers and the market offers them new business opportunities. Globally-renowned Mexican companies, such as Nemak, Rassini, TREMEC and Grupo Quimmco, export technology and advanced-manufacturing components. For instance, TREMEC recently opened an engineering center in Belgium where it plans to focus on transmission components. Additionally, Mexico was invited as a guest country to the 2018 Hannover Messe fair that focused on industrial automation and Manufacturing 4.0. These trends are being increasingly adopted by Mexican players and ProMéxico wants to showcase that to the world.

Q: How has the NAFTA modernization process affected ProMéxico’s strategy to attract FDI?

A: The industrial structure of Mexico has not been modified because of the NAFTA renegotiation. As a matter of fact, the country reached record automotive exports and production in 2017. This means value chains continue working and ProMéxico is trying to diversify the country’s portfolio of investment to reduce the country’s dependence on North America. We have pushed more strongly for diversification of both FDI sources and destination markets. ProMéxico visits many countries to attract investment into the automotive, aerospace and other technology-oriented industries. The opportunities that Mexico offers for advanced-manufacturing are far greater than the impact from changing political conditions. Mexico is a great country because of its strong advanced-manufacturing base and competitive human capital.

Q: How likely are Mexican companies to adopt automation and other Manufacturing 4.0 technologies?

A: Mexico has the capacity to be highly successful in Manufacturing 4.0 and companies are open to these technologies. The organizations that fail to implement these processes into their production operations will be out of the market in the medium term. The only way to remain competitive in the automotive industry is through innovation. We boost technological innovation through the expos and missions that we organize for Mexican players so they can learn what is being done in Germany, Japan or the US and incorporate those best practices into their productive processes.

Q: How do you expect the vehicle-electrification trend to impact Mexico’s automotive industry?

A: EVs are a disruptive change that has not yet attracted strong support in Mexico. There are several companies making advances in that segment, though. For instance, Nemak and Rassini have created their own EV-focused divisions and several Mexican companies already supply for Tesla. ProMéxico wants this trend to further permeate Mexico’s industrial structure so that it translates its focus from metal-mechanic components to electronic-digital components. By 2025, I expect Mexico to be a leader in the development of components for EVs. China and the US are the main powerhouses in the production of EVs and Mexico is in the process of finding its value niche. This will continue consolidating the country’s position as a key player in the global automotive industry.

Q: How ready is Mexico to participate as a technology- developer rather than as a manufacturer in the global automotive industry?

A: Mexico has everything it needs to be successful in this area. Mexico’s human capital is well-trained, specialized and young, which is fundamental for technological innovation. Additionally, the country is positioned as an advanced- manufacturing country. Although there is still more to be done, Mexico has increasingly well-trained engineers, better information and best practices and these advantages will eventually make the country highly successful in this area.

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