When people talk about current business opportunities in Mexico, the energy and telecom industries get a lot of attention, given reforms in these areas. However, the auto industry is booming – and has very positive prospects.
Mexico is the 8th biggest automotive producer in the world and has the highest growth rate in the top 10 countries in that list. Mexico is already the fourth largest car exporter, only behind Germany, South Korea and Japan.
Mexico is about to overtake Brazil as the top Latin American automobile producer for the first time in more than a decade. So, what is Mexico’s appeal for auto producers? The main factors are probably low labour costs – about 20% of those in the U.S., according to some studies; skilled labour; product quality; and Mexico’s proximity to the US, the world’s biggest car market. In addition, products made here can be exported to any of the 45 countries that have free-trade agreements with Mexico.
Companies like Nissan, Mazda, Honda, General Motors and Audi have all invested in Mexico in the last few years. And whilst there are no British car manufacturing plants in the country, the presence of British brands is strong, with companies like Jaguar Land Rover and Mini Cooper proving successful in the market.
In February, the Deputy Prime Minister celebrated Aston Martin’s arrival in Mexico with an event at their new showroom. Aston Martin also participated in our recent Queen’s Birthday Party, showcasing two of its famous models.
During his visit the Deputy Prime Minister also had the opportunity to see the VUHL 05, a Mexican assembled ‘super car’, which has been showcased at the Goodwood Festival of Speed. It is an excellent example of UK-Mexican co-operation - about 30% of the car has been sourced from the UK, including its engine, gearbox and braking system.
Most experts expect to see further growth in the Mexican automotive industry. In UKTI Mexico we will work to help more British companies explore these opportunities.