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Guy VleugelsPresident International Business Partner
•Industrial Engineer •20 years North-Mexico (manager, director, CEO)•Board Member of various companies•Consultant ( Industrial clusters, linkage education -industry,…)•Honorary Consul Belgium
Why Mexico?
• Geographic location• Population growth, +25% is -15 jaar• AVG age 27 year = India (Ch 36 ; Br 29 ; D 45)• TLC with +40 countries (#1 world)• Infrastructure (water-land-air)• Transparency customs• New technologies• Supply chain integration• Quality culture (ISO, AS, NADCAP,..)
• Support technical training (high tech training centers, R&D, Engineering & Design)
• Fiscal benefits• Legal protection of “intellectual property”• Availability of soft landing, fast track/risk free shelter
programs
- New policital culture: + competitiveness ( hiring/firing personnel, elimination public and private monopolies, unions )
- Hourly wage cost; flexibility hours and shifts; low cost extra time; young, eager, ambitious population who wants to succeed and climb up
- De-globalisation, regionalisation of "manufacturing“; Mexico is "low cost" operation for USA.
Important Industrial Sectors* Auto : Production growth of 1,2 Million units 2009, to 3,2 Million 2014.Mazda, Honda, Audi, VW, Chrysler, Ford, Daimler Trucks, GM, Nissan, 7th position producer and 4th exporter.
* Electronics : Increase Asian investers Motorola, Foxconn, Yazaki, Sumitomo,…
* Airspace : clusters in Queretaro and Chihuahua, Baja California, Sonora, Nuevo Leon. Bombardier, Embraer, Boeing, Honeywell, Cessna, Fokker, Safran, Zodiac, Eurocopter, Hawker Beechkraft, GKN Aerospace, Textron, GE ...290 comp. in 2013, est. 340 in 2015, est. 450 in 2020
- Conclusion : GDP - PPP, output adjusted by purchasing power parity ….
Mexico = ranked 11th world !
Country GDP(PPP)/capita
US 53000Belgium 40760Mexico 17390China 11868 India 5450
How to lead an operation in MexicoIndicators:
•Annual inflation : stability !!
“Rigid regulation with flexible application, vs flexible regulation with rigid application”.
•Import/export companies, (Maquiladora), options : - no legal “footprint”, Shelter company (fast, efficient, cheap, no red tape, risk free…ideal to start) - partly legal footprint - full “SA de CV”For inst. 10% annual profit to co workers , time structure (48 hours week, 6 working days initial holiday)
Local legal structure based on lawyer and notary (more participating function).
Philosophy of Trade Agreements
• Internal market weak ( depending on petro – tourism – foreign investments– “remesas”)
• Dependence USA.• Lack of technology.• Demographic problem (how to create work for
growing population and high educated youth)
How to trade in Mexico• “Made in Mexico” , adapt products to local
market/demands and taste.• Culture of negotiation, balance between correct and
sufficient; “Everything has its price” and “everything is negotiable”; to create positive feeling by negotiation thinking you outmastered the counterpart.
• Mexican inferiority (due to past): foreign products are seen as superior compared to national
• High consumption need: self image depends on material possessions
Conclusions- Not a far-flung culture- Warm, open, flexible, skilled and hardworking people- Language = English (if Spanish is no option).- Perfect road network North-South, East-West is a bit
difficult (geography, mountains)
- All roads lead to Mexico City, +/- 25 Million habitants and central location, still central distribution point. * Safety (also transport) * Time consuming transport * Competition illegal import China (shoes and textile).
Alternatives:
- Guadalajara, “Silicon valley”, but also trade. - Monterrey, classic steel industry.- Bajio = valley around Mexico City (Queretaro, Guanajuato, San Luis Potosi, etc.) growth region, close to Mexico but without discomforts of big city.- North (Chihuahua, Baja California, Nuevo Leon, Tamaulipas, etc.), very industrialized and based on US model, aimed at US market.
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