Private Investment to Move MexicoSat, 09/01/2018 - 12:42
Q: How is Deloitte participating in developing an integrated mobility strategy for the country?
AT: We are participating in the planning of new mobility strategies for different cities. States such as Nuevo Leon, Puebla and Mexico City see this as a priority but we think there should be an integral strategy going forward. Infrastructure and development of public transportation services are just one side of this issue; the government must also consider how to implement new technologies to improve connectivity and ease the introduction of new mobility systems and alternative vehicles. From our side, we can help cities know how to best integrate all players into a single mobility ecosystem.
MN: The concept of Smart Cities will be fundamental to develop an integral mobility strategy. If the government is thinking only about transportation, its policies will only go so far.
Q: What do you see as the main problem that prevents further investment in mobility?
MN: The problem is that there is no clarity in the legal procedures to establish rights of way for new public transportation investments. From our perspective, the best way to solve the issues in mobility investment is through the development of more public-private partnerships (PPPs). The government does not have enough resources to solve the country’s problems but it must find ways to attract investment and generate returns for any parties interested. In cities like Tokyo or London, the public grants concessions to private companies to operate all forms of public transportation and that model works perfectly. In Mexico, however, the government is still afraid to relinquish control on something that is considered strategic for the development of the country.
The government should be more open to analyzing new financing strategies for public transportation. Afores, for example, have been quite successful in financing long-term infrastructure projects, leading to the creation of tools such as Fibras. The energy sector is another good example of how private investment has led to development in the whole industry and better options for the population. This still does not happen in the public transportation segment but if it did, we could solve part of our mobility problems without the government having to invest directly in this.
Q: What should be the government’s immediate priority in terms of mobility?
AT: In the short term, the government should make a diagnosis of how we could solve mobility issues while integrating Smart City concepts. Once we have this analysis, we can determine which actions to take based on a quick-win strategy. Metrobús has been an excellent solution for Mexico City but it is still insufficient considering the needs of the entire population. We need to explore more underground mobility possibilities, as well as integrated solutions that can solve transportation issues seamlessly. So far, we have limited options, which is why most people still prefer to use their own vehicle.
Q: How much opportunity do you see for Chinese vehicles to grow their participation in the domestic market?
AT: Mexico is a very price-sensitive market and because of the competitive prices that these brands will offer, we think they will have a great opportunity to conquer the market. The only downside for these brands is that there is still a stigma that relates Chinese production with bad quality. There is no success story of Chinese automotive brands in Mexico and most consumers’ minds go to knock-offs when thinking about Chinese production.
MN: Although the market has a strong perception regarding Chinese production, the truth is that these vehicles are now of the highest quality. Moreover, these companies are investing heavily in the market and bringing manufacturing operations to show their commitment to the country.
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