News Article

Mexican Automotive Industry: Investment & Competitiveness

Thu, 09/24/2015 - 13:23

Opening the proceedings was Mario Chacón Carrillo, Head of the Investment Promotion and International Business Unit at ProMéxico. The first focus of his presentation enforced the idea that Mexico is, without a doubt, a vital investment destination for large OEMs due to “quality, just in time (JIT) systems, low-cost labor, human capital, R&D infrastructure, its strategic location, and the ease and capability of exporting to 46 countries.” Chacón Carrillo continued by informing us that Mexico is a rising star according to the Boston Consulting Group and, quoting other consulting firms, he showed how the country will become one of the eight largest economies by 2050. “Mexico has 46 free-trade agreements, which gives us a very competitive position over other countries. Thanks to the Trans-Pacific Partnership negotiations, Mexico will heavily increase its presence in the Pacific region,” Chacón Carrillo explained.

He then listed Mexico’s positive attributes, such as the country’s median population age of 28, and that local universities produce almost 115,000 engineers per year. These factors are pushing the country as the third high and medium technology exporter in the world. “The skilled human capital is one of the reasons that companies invest in Mexico,” he mentioned.

The automotive industry contributes 3% of Mexico’s GDP, and the country is the seventh car producer and fourth largest exporter worldwide. “Mexico produces to an extremely high-quality, evidenced by the fact that eight out of ten cars manufactured here are exported,” he continued. He then told us that OEMs have invested nearly US$31 billion in the last five years, and indirect investment in the automotive industry was US$4.4 billion in 2014. “By 2020 we expect a production rate of 1.8 million units. The Bajio region has grown very fast and there are lots of opportunities in stamping, semiconductors, design, die casting and almost all the processes required for the automotive industry,” Chacón Carrillo concluded.