Q: How is Russell Bedford evolving in order to fit the dynamic tendencies of the automotive sector?
A: We have developed two main strategies. The first is to hire people with the cultural and language experience to suit the needs of companies entering Mexico. For example, Japanese companies and individuals are more comfortable speaking in their native language, which is why it is important to have people who can communicate with them. The second strategy is to take advantage of our international experience and network. We need to be able to receive input from any expert in the world on the best international practices and trends.
Q: How can Russell Bedford help OEMs and Tier 1 companies that want to enter the country?
A: When an OEM decides to enter the country, many of its suppliers follow in its footsteps. This is the market that we want to attack, so we have created a division that specifically helps with that. We can assist these companies during their creation process and then support them right up until they form their own accounting and financial departments. Once they no longer need our help, we can continue with them as advisors or auditors for accounting, tax, legal, and payroll services.
Q: In order to attract more foreign investment, what advice would you give the Mexican government on how to improve the financial environment?
A: The Ministry of Economy (SE) needs to work on many modifications that will ease business processes in the country. A construction license, for instance, can take up to 90 days in any state, not to mention the amount of documents that would be needed to obtain it. This is a real challenge for SE, but one that must be overcome if Mexico is to become a better business destination. Also, there need to be improvements to the tax return system that favor foreign investors. However, since investors need to consider a 16% increase in their investment, and the fact that this process could take up to a year, the whole situation could create a cash flow problem.
Q: How does Russell Bedford support lower-tiered companies in providing services to the bigger players?
A: In the supply chain, there are many layers between the first supplier and the customer. SMEs that want to supply Tier 1s need to understand that they must have the best quality in all their processes, including their finances. They need to show that they are solid, of high quality, and can produce financial results in accordance with international regulations. Normally, SMEs do not know how to show their financial results to clients to show that they are healthy and that they possess a solid financial position. We can help them prepare for that in accordance with national or international regulations.
Q: With the arrival of many important OEMs to Mexico, what incentives are states offering in order to secure their investments?
A: In some cases, the states offer tax-free land and discounts in payroll for a certain amount of time. However, this is minimal when compared to the total investment that these companies make in the state. For example, Guanajuato has offered a local tax incentive to certain companies, as have San Luis Potosi and Nuevo Leon under a different structure. However, incentives are not the main reason to settle in a certain state; the real reason is how easy it is to enter the market from there. For example, Puebla does not offer any incentives and Audi decided to establish its plant there. The real reason for this is the proximity to Volkswagen and its suppliers. Guanajuato offers some incentives but the real attraction is the specialized labor in the state, just as in Queretaro, while KIA decided to locate in Nuevo Leon because of its proximity to the US. From a federal point of view, there are no incentives so it is really a matter of location and labor.
Q: What unique advantages distinguish Russell Bedford from its competition in the automotive industry?
A: We apply three important methods. The first one is personal attention from the partners. The second one is our rates, which, according to many surveys, are highly competitive when compared to the bigger companies. With 80% of our clients hailing from countries like Germany, Japan, China, and Korea, among others, the last method we adopt is to try to optimize our cultural understanding to build a strong sense of trust and loyalty.