During a discussion held between Burgess Yachts CEO Jonathan Beckett and Gotham Jets CEO Gianpaolo De Felice, Ferrari North America CEO Marco Mattiacci made a bold statement saying that “Mexico is the next China.”
Mexico’s future is shaping up to make it the next contender in automotive production. This increase in production is due in some part to Ferrari with its upcoming production of La Ferrari as well as the entire automotive industry. Ferrari North America CEO Marco Mattiacci wants to reduce the production of Ferraris from last years’ numbers of 7,318 to less than 7,000 to preserve the brand’s exclusivity. While Ferrari production may be lessening because of exclusivity, other brands are having the reverse effect, pushing Mexico’s production to an all time high.
Production in Mexico is anticipated to steadily grow over the next 13 years due to increased wealth creation, desire for industry, and international investments. Mexico’s status has given indicators that manufacturing is indeed increasing due to exceptional quality of education for workers, and governmental reform. The future of Mexico’s automotive industry is looking promising!
After detecting its first light spectrum from a distant galaxy in 2011, Mexico’s Large Millimeter Telescope (LMT) is set to begin its first scientific observation season and gather the data for which it was constructed: how stars, galaxies, and planets are formed. …
As the world’s largest single dish, steerable, millimeter-wavelength telescope, the LMT is located in the central Mexican state of Puebla at the summit of Sierra Negra, a dormant volcano nearly three miles in height.
Despite its location and 70% of the LMT’s funding coming from Mexico, the astronomical initiative is actually a partnership between Mexico’s National Institute of Astrophysics, Optics, and Electronics (INAOE) and the University of Massachusetts and Amherst College in the United States.
Once the telescope was constructed, building a staff to man the laboratory became the main challenge for David Hughes, the director of the LMT. A challenge indeed as Mexico’s astronomy community was centered on optical and infrared telescopes prior to the LMT.
Hughes was successful in this endeavor, however, as the group of M.Sc. and Ph D. students he trained not only helped train other members of the Mexican community, but they have also gone forth and taught others – forming the next generation of LMT scientists.
The steel industry in Mexico is growing as a result of the boom in Mexican automotive manufacturing. To keep up with demand for steel, Mexican steelmakers are expected to invest almost $3 billion on new and improved factories. …
As we’ve reported before, Mexico’s automobile production has grown incredibly in the past few years; rising to nearly 6 percent of Mexico’s GDP. Mexico is in prime position to take over a very large portion of the market for cars due to its geographical location. Mexico has become a magnet for automakers seeking access to North and South American markets and other regions. Mexico has trade agreements with more than 40 countries, opening markets for automakers and steelmakers. In fact, Mazda plans to open an $800 million factory, expected to open in 2014. Auto exports to an expected to rise to 4 million vehicles by 2017, according to The Mexican Automobile Industry Association.
New trade deals and low-cost labor have made Mexico a profitable base for car production. It's also attracting other parts of the auto-supply chain, from steel mills to brake makers, as the "made in Mexico" trend grows. “While Mexico is the world’s 13th-largest maker of steel overall, its production of automotive-grade metal that has been galvanized, or coated in zinc to prevent rust, remains low, said Oscar Albin, president of the National Autoparts Industry in Mexico City.”
Mexico has become the new hotspot for investors seeking opportunities in Latin America. The new president of Mexico, Enrique Peña Nieto, has been pushing for economic change, which has encouraged many investors put cash in to Mexico. A recent CNBC article quoted a research director at Frontier Strategy… Group as saying, “Brazil became a lot less attractive in the last year and a half. Mexico has definitely come up as a priority."
Mexican companies have proven themselves to have a better profit profile than those within Brazil, with higher profitability and better margins. Brazil has the largest economy within Latin America, but it has been fighting against high inflation, leaving investors worried that over a potentially low-growth environment. Compared to Mexico’s quickly growing economy, Brazil’s grew only 1 percent last year.
In the past year, iShares MSCI Mexico Capped exchange-traded fund grew over 17 percent. This is compared to a fund trailing Brazil, iShares MSCI Brazil Capped Index Fund, which depleted by over 15 percent.
Key fiscal, financial and energy reforms are expected in Mexico this year, and this comprehensive reform process will only deliver higher growth capacity for Mexico. Experts predict its economy will expand approximately 4.5 percent this year.
Adding to their strong presence in the electronics and automobile industries, Mexico is a major player in the worldwide aerospace industry. In a relatively short time, this country of 113 million people has gone from a minor parts supplier to a major partner of several large aviation companies by … its attractive offerings of lower-costs, a free-trade system, and skilled, motivated workers. Mexico can thank the large amount of foreign direct investment they have received in recent years for solidifying their place in the highly competitive, fast-growing aerospace industry.
Strong cooperation between governments, universities, and private sectors in promotion of the capabilities of the Mexican aerospace sector has incentivized foreign manufacturers to increase their operations, not only in manufacturing but also in establishing an engineering base. For instance, Mexico, Baja CA, Chihuahua, Nuevo Leon, Sonora and Queretaro have larger aerospace clusters.
“They make it easy for you to do business down here,” says John Gardner, strategic program manager at Kaman Aerostructures, another newcomer in Chihuahua. “They provide a 'soft landing,' to get a quick startup—a good startup. We got a lot of support up front and afterward.”
Aerospace investors in Mexico also cite the country’s geographic location, open trade policies, political and economic stability as their main reason for moving manufacturing south of the border. Such stability has been particularly attractive to companies fearful of their intellectual property security and swayed them away from such countries as China.
Ever since the Mexican Mastretta sports car went viral, another Mexican firm announced its intentions to make a super sports car.
Pronounced ‘vool’, the VUHL is an abbreviation created from the phrase, “Vehicle of Ultra-lightweight and High-performance”. Vuhl, a new highly specialized supercar manufacturer, will launch onto the world stage when it unveils its first production car, the Vuhl 05, at this year’s Goodwood Festival of Speed.
According to the company, the Vuhl 05 is a “road-legal lightweight supercar that’s been precision-engineered for the track and endowed with exhilarating performance.” A brand started by brothers Iker and Guillermo Echeverria, whose Mexican/American design agency came up with the 05’s look. Vuhl will produce its chassis and complete final assembly in Mexico City after receiving lightweight bodies fabricated in Canada before vehicle handling is optimized in the UK.
No other details about VŪHL’s 05 have been released, although we know it will feature components sourced from Magna Steyr, Multimatic and Ford. When the VUHL 05 supercar break lights, it will be very interesting to see if this vehicle will revise the way the world view Mexico’s auto industry.
Expanding its Mexican investment, French-German-Spanish helicopter manufacturer, Eurocopter, opened a new, 12,000 square meter manufacturing plant in Queretaro. The plant will create approximately 200 specialized jobs by mid-2014, adding to their current 50 employee workforce. …
Built next door to Canadian manufacturer Bombardier, Eurocopter’s plant joins a long list of American and European aviation manufacturers who use the nearby aeronautical university to staff their respective factories. For Eurocopter, their $100 million plant is set to produce high-technology structural metallic components for both Airbus and their own Ecureil helicopters.
Despite this brand new investment, Eurocopter is not a new presence in Mexico, but rather has been a fixture in the country for over 30 years. In that time they have asserted 50% of the Mexican helicopter market, and host a fleet of over 450 helicopters operating across Central America, the Caribbean, and northern South America, in addition to Mexico. So confident is the company in their continued success abroad that they plan to invest up to $550 million in Mexico over the next few years.
After producing 3 million cars this past year, Mexico became the eighth biggest auto producer in the world. Mexico achieved this coveted spot due to its prime geographic location for exporting to the Americas, its open trade policy, and its work force experience. …
Prior to now, Mexico built its economy around low-paying, labor-intensive industries. But, ten years ago when such industries fled to China and Central America in search of cheaper labor, Mexico endeavored to make a change. By expanding industries that required better-educated, better-paid workers, Mexico, in turn, boosted its middle class. The middle class now makes up almost a quarter of the country’s population.
Currently the outlook is positive, production numbers are expected to grow and an association with good quality and products. Yet, concerns lie in sustaining this economic growth. Despite having trade agreements with 44 countries, Mexico’s chief trading partner is the U.S. This reliance puts Mexico in a precarious position should the U.S. pull back on its imports.
American exports are on the rise and the U.S. has Mexico to thank for it. During the time when the American economy struggled to rebuild itself and its other trading partners from around the world decreased their imports by five percent or more, Mexico continued to stay true. By the end of November… 2012, Mexican-based companies and American multinationals in Mexico imported $199.9 billion worth of goods and services.
There may still be a trade deficit between the U.S. and Mexico, but reevaluating the trade balance between China and other U.S. trading partners has served the Mexican economy well. Increases in production investments and American imports by American companies and Mexican multinationals will help bolster positive economic growth for Mexico.
To put these statistics into perspective, according to the Office of the U.S. Trade Representative in Mexico, in 2011 American exports to Mexico added up to 13.4 percent of total U.S. exports that year.
Corporations and associations around the world continue growing the number of small, medium and very large meetings organized in Mexico. Mexico has recently secured about 300 events with global corporations such as Microsoft, Nike and Sony Corporation to host their company meetings in Mexico. And among associations, Mexico has… recently won the bid for hosting the World Emergency Medicine Congress which is expected to host about 8,000 people coming from all around the world in Mexico City, and the Ophthalmology World Congress expected to have 8,000 attendees in Guadalajara in 2014.
As specific industries boom in Mexico, more companies and associations are also looking to organize their meetings in that North American country. For example, Queretaro is among the top booming cities around the world within the aerospace industry, so many of the companies that have a presence in that area are also organizing their internal and client meetings in that city. Something similar is happening with the Mexican automotive industry where Honda, Toyota, Audi, and Volkswagen, to name a few, are already organizing Mexico-based events given their local investments.
“In the Americas, Mexico is ranked #5 top meetings and conventions destination only followed by Buenos Aires, Rio de Janeiro, Sao Paulo and Vancouver, according to the International Congress and Conventions Association – ICAA,” said Carlos Collado, executive director at the Congress and Conventions Bureau in Mexico City.
Carlos Iván Pérez Marrufo, executive director of ProEventos managing two convention centers in Campeche added, “We are already having important events [in Campeche, Mexico]. People abroad are already seeing Mexico as a destination that offers the venues, the culture, the professionalism, and the enthusiasm and energy to lead these types of efforts.”
Meetings Industry Contributes to Local Economic Development
Mexico’s meetings and conventions industry is not just about the unique experience it brings to attendees. Among the key factors that Mexico seeks in promoting the industry is to look for local economic development for each market destination. In Queretaro, for example, a new convention center was recently opened in response to the increasing demand of aerospace organizations looking for convenient venues to host their events.
Mexico has from small corporate retreats to huge summits or American or world association congresses. Mexico has everything for everyone in a very affordable way. Mexico is very well connected to the world as there are lots of direct flights not only to the main hubs as Mexico City and Cancun, but also to a lot of small or medium sized destinations.
North American PCMA Advisory Members Talk Mexico
In a recent Mazatlan-based event, dozens of North American meetings industry leaders gathered to share best practices with their Mexican peers. Watch a series of exclusive MexicoToday interviews where these leaders share their stories while in Mazatlan last November:
To watch the full list of videos on Mexico as a meetings destination, visit our MexicoToday YouTube playlist.
Starting in the second quarter, Nissan Motor Company, the largest automaker in Mexico, will begin domestic production and export of its Note subcompact car. While Nissan plans to continue production of the Note in their plants located in China, India, and Thailand, export of the Mexican-made Notes will be… throughout the Americas.
This will be the third model produced at the factory in Aguascalientes for Nissan, who produced over 683,000 vehicles last year, and solidifies Mexico’s position as a positive environment for auto production. An environment made possible by cheaper labor, logistics, and free trade agreements, according to some analysts.
Since 2009, Mexico has doubled their auto output and exports thanks in part to economic recovery in the United States as well as investments from foreign automakers. Mazda Motor Corp, Honda Motor Corp, and Audi are all in the process of opening factories of their own, but will have to fight hard to shrink Nissan’s 25 percent local market share.
On November 7-9, meetings industry and incentives leaders gathered in Mexico to share their latest industry insights and offerings at Icomex 2012. At the World Trade Center Mexico City, hundreds of executives from different countries of the Americas – and MexicoToday spotted also some attendees from Italy among many other Europeans… – enjoyed the three-day event. Click here to watch our exclusive video and click here to watch photos on our MexicoToday Flickr album.
Named the leading trade show in Latin America for meeting and incentive planners, Icomex organizers scheduled more than 600 meetings in advance among exhibitors and attendees. Adalberto Rodriguez Fallas from the Costa Rica Tourism Board stated, “We are here with a group of fine entrepreneurs that are here to offer products, and to see what we can offer to the world.” He also added, “Here is where we are going to show what Costa Rica has to offer in the segment of conventions and incentives as well.”
Icomex’s 2012 guest country was Costa Rica which showcased an impressive stand on the exhibition floor. Other countries and cities that participated at this year’s Icomex include: Argentina, Bahamas, Cuba, Jamaica, Peru, Las Vegas, and several other Mexican states, including Chiapas, Mazatlan, among many others.
Following the dialogue between business and policy makers, the G20 Trade and Investment Promotion Summit 2012 concluded a successful two-day event on November 6 with a promising agenda and determined next steps.
Under an environment of close cooperation and discussion between agencies, the following five strategic challenges were identified:
1. Strong emphasis on policy coherence and sustainable development are more than ever needed due to: a) the emergence of the new global economic landscape characterized by the relevant link between trade and investment, b) the rapid evolution of global value chains in scope, scale and depth, and; c) the shift of trade and investment promotion paradigm.
2. Existing constrains of public funding for trade and investment promotion, and strong desire for working on customized trade promotion optimization (TPO) and investment promotion agency (IPA) country solutions while fostering international peer cooperation and learning.
3. Need for local small and medium-sized enterprises (SMEs) to access and benefit from global value chains (GVCs).
4. Include private business in the economic development strategy-making process.
5. Missing fast-moving networks for best practice exchange integrating trade and investment.
At the inauguration ceremony and plenary session, executives from the organizing committee provided an overview and positioning of the Summit, including the International Chamber of Commerce (ICC)’s executive director of policy and business practices Stefano Bertasi and welcoming remarks by ProMexico’s CEO Carlos Guzman Bonfill. The World Trade Organization (WTO)’s chief of staff Arancha Gonzalez Laya spoke about the changing landscape of trade, where she highlighted the need to focus on global value chains to further trade and investment around the world, and later on the United Nations Conference on Trade and Development (UNCTAD)’s director for investment and enterprise division James Zhan discussed the key trends and strategic challenges global investment is facing nowadays.
Following a series of closed-door roundtables, key representatives offered a wrap up press conference where they presented the key strategic challenges listed above as conclusions for the summit. Key representatives speaking to members of the press included ProMexico’s CEO Carlos Guzman Bonfill, UNCTAD’s James Zhan, and OCDE’s chief of staff and sherpa to the G20 Gabriela Ramos.
Alejandro Ramirez, CEO of Cinepolis and B20 chair, also attended the event, where he provided closing remarks and conclusions on a closed door session. In an exclusive interview with MexicoToday, Ramirez stated, “The G20 Trade and Investment Promotion Summit was one of the recommendations we presented at the B20 Summit in Los Cabos which recommended all trade and investment promotion agencies to get together to share best practices and analyze ways how business and government can work closer to advance free trade and investment, and put pressure on G20 countries at a time of growing protectionist threats.” Ramirez also added, “This event allowed trade and investment promotion agencies to understand the importance of global value chains, and to analyze ways they can help, especially to small and medium enterprises, in having access to those global value chains which will make them more competitive, resulting on their countries to become more competitive.”
Mazda Motor Corp. will expand its relationship with Toyota Motor Corp. now that it has an agreement with the auto giant to build models intended for the North American market at its Mexican factory once the facility begins operations. …
The Mazda plant, currently under construction in Guanajuato, Mexico, will begin producing about 50,000 sub-compact Toyota vehicles starting around the summer of 2015, Toyota and Mazda said in a joint statement.
The Mexican plant is slated to go onstream in the January-March quarter of 2014 with an annual output capacity of 140,000 vehicles employing around 3,000 people. Mazda intends to boost the facility's capacity to 200,000 vehicles when it begins building Toyota subcompacts so that it can produce 50,000 vehicles other than its own. Mazda expects a jump in profitability through procurement of common parts with Toyota.
Its deal with Toyota is good for both companies, but Mazda stands to benefit more, said Noriyuki Matsushima, a Tokyo-based analyst at Citi Research.
Mazda will not only save on the capital investments required for the new factory, but the additional production for Toyota will lower the plant's fixed production costs per vehicle, he said. Toyota will benefit by shifting production of subcompact cars to Mexico from Japan, wjere exports aren’t profitable at current exchange rates.
Globally, Toyota plans to launch 21 new hybrid models by the end of 2015 and will make further efforts to expand its hybrid-vehicle product lineup and sales territories, the automaker said.
More than 80 per cent of Canada's hybrid vehicle sales are Toyota and Lexus hybrids, the automaker said.
Leaders of trade and investment promotion agencies from around the world converged on Mexico City November 5-6, 2012 to hammer out strategies for cooperation that will help drive a global economic recovery. Representatives of G-20 member countries, multilateral organizations and leading… businesses joined in the event activities, which took place at the Four Seasons hotel over the course of two and a half days. In all, 22 agencies from 18 countries took part in the meetings, according to event organizers.
The G-20 Trade & Investment Promotion Summit (TIPS) was held as part of a series of follow-up events to the summit of heads of government of G-20 member countries organized in Los Cabos, Mexico, in June of this year. The G-20 is an organization composed of 20 leading developed and emerging economies, including that of the European Union. The group was launched in 1999 as a forum for consultation and cooperation by finance and banking officials on policy matters affecting international economic stability. The presidency or chair of the G-20 rotates annually. Mexico, as chair for 2012, hosted the Los Cabos meeting of heads of state and took the lead in organizing subsequent events to pursue the group’s agenda to promote healthy economic growth. Mexico’s own investment and trade promotion agency, ProMéxico, acted as host and facilitator during the activities of the November summit.
The formal activities of the TIPS opened with an inauguration and plenary session featuring presentations on key topics to be addressed during the meetings. This session was followed by two days of roundtable work meetings and presentations in a format designed to maximize exchange of ideas and experiences among the participants. Specific themes of roundtable sessions included:
In addition to the working roundtables, presentations during plenary sessions featured topics such as the emergence of global value chains, the value of joint trade and investment promotion and benchmarking for trade promotion, among others. The roundtables and plenary sessions were led by representatives and specialists from multilateral organizations such as the World Trade Organization (WTO), the United Nations Conference on Trade and Development (UNCTAD) and the Organization for Economic Cooperation and Development (OECD), as well as from country agencies such as UK Trade and Investment (UKTI), the Australian Trade Commission (Austrade) and the Instituto Español de Comercio Exterior (ICEX).
Within the context of the overall themes of cooperation and the importance of facilitating trade and investment, a number of topics received particular emphasis at the meetings. Among the most cited was the growing importance of global value chains (GVCs) in shaping the environment for modern international business. As defined in the event program, GVCs mean that goods and services cross borders multiple times before reaching consumers in their destination market. WTO Chief of Staff Arancha González commented extensively on this topic in her opening remarks, referring to the concept of “trade in tasks” as opposed to trade merely in finished goods. As manufacturing production chains have become ever more globalized in recent years, for example, more and more products are incorporating materials and value-added processes provided in multiple countries over the course of the production process. This evolution is creating products and services that González called “made in the world,” rather than the conventional notion of goods made in one country for export to another.
The rise of GVCs has important implications for numerous areas of both national and international trade policy. Among these, as the WTO’s González emphasized, is the increasingly counterproductive nature of protectionist trade and investment policies conceived in a prior industrial era. In the context of GVCs, attempts to “protect” a particular domestic industry may result in inhibiting the importation of goods or components requiring locally provided added value, or investment in production or service infrastructure that would generate local jobs and technology transfer. As OECD Chief of Staff Gabriela Ramos added in her concluding comments, in the context of GVCs, it is important to relinquish the simplistic idea that imports are the enemy and exports are the friend, as now all may be equally necessary to a country’s healthy economic growth. Speakers remarked that improving the quality of factors such as education and training, social safety nets, infrastructure and environmental protection is key to the success of GVCs, and as such the global production chains optimally will serve to boost these aspects locally.
Throughout the sessions, particular attention was given to the role of small and medium enterprises (SMEs) and the need to incorporate them into GVCs. The WTO’s González urged the assembled promotion agency representatives to help provide SMEs with quick and accurate information to support their internationalization efforts, and UNCTAD Investment and Enterprise Director James Zhan called on multilateral agencies to boost capacity building among SMEs to help incorporate them into the supply chains of multinational corporations.
At the conclusion of the intense two days of meetings, participants expressed enthusiasm for the potential advances that could be achieved by the commitments to cooperation and best practices discussed. In his concluding remarks, ProMexico’s Carlos Guzmán presented the following challenges to trade and investment promotion agencies going forward:
If promotion agencies and large corporations can embrace these challenges with enthusiasm and creativity, the message is, the world economy will be more likely to make good on James Zhan’s optimistic suggestion that global trade and investment will experience a boom following recovery from the current stagnation.