Competitive advantages for investing in Mexico Mexico: a ... ??Competitive advantages for investing in Mexico ... Competitive advantages for investing in Mexico 4 ... SLP 14 A country with great

  • Published on
    07-Apr-2018

  • View
    218

  • Download
    5

Embed Size (px)

Transcript

  • Binational Center Library / Texas A&M International University

  • Competitive advantages for investing in Mexico

    Mexico: a leading economy

    A country with competitive sectors

    2

    ProMxicos strategies

    Binational Center Library / Texas A&M International University

  • Mexico: an important global actor

    3

    1. Mexico is a democracy.

    2. Mexico is one of the largest economies in the world.

    3. Mexico has great macroeconomic stability.

    4. Mexico is an open economy.

    5. Mexico has young, talented and highly-skilled people.

    6. Mexico is a leader in advanced manufacturing.

    7. Mexico is the next global logistics high value added hub.

    8. Mexico is a world within a country.

    9. Mexico is a reliable and attractive destination for investment.

    10. Mexico is ready to increase its productivity through its structural reforms.

    Binational Center Library / Texas A&M International University

  • Competitive advantages for investing inMexico

    4

    Binational Center Library / Texas A&M International University

  • Exportsplatform

    Internalmarket

    Humancapital

    Advancedmanufacture

    Macroeconomicenvironment

    Mexicoscompetitiveadvantages

    5 competitive advantages

    5

    Binational Center Library / Texas A&M International University

  • Forecasts

    02,0004,0006,0008,000

    10,00012,00014,00016,00018,000

    EU

    Chi

    naJa

    pn

    Ale

    man

    iaFr

    anci

    aR

    eino

    B

    rasi

    lR

    usia

    Italia

    Indi

    aC

    anad

    A

    ustra

    liaE

    spa

    aM

    xic

    oC

    orea

    Mill

    ion

    dolla

    rs

    Fuente: Goldman Sachs. The N-11: More Than an Acronym. Documento de economa mundial No: 153. Marzo de 2007/ HSBC/ACCENTURE.1/ Pronstico de Goldman Sachs / Fondo Monetario Internacional.

    20501

    5th

    plac

    e2013

    Worlds largest economies

    14th

    pla

    ce

    Goldman Sachs ForecastGross Domestic Product

    (Billion USD)

    6

    Gross Domestic Product(Billion USD)

    Goldman Sachs estimates thatMexico will be the 5th largesteconomy by 2050.

    According to Accenture, Mexicowill be one of the Big Six in2025.

    According to HSBC Mexico willbe the 8th largest economy in theworld by 2050.

    US

    A

    Chi

    na

    Japa

    n

    Ger

    man

    y

    Fran

    ce UK

    Bra

    zil

    Rus

    sia

    Italy

    Indi

    a

    Can

    ada

    Aus

    tralia

    Spa

    in

    Mex

    ico

    Sou

    thK

    orea

    Binational Center Library / Texas A&M International University

  • $0

    $50

    $100

    $150

    $200

    $250

    $300

    $350

    $400

    0%

    20%

    40%

    60%

    80%

    100%

    120%

    140%

    160%

    2000

    2001

    2002

    2003

    2004

    2005

    2006

    2007

    2008

    2009

    2010

    2011

    2012

    2013

    Billi

    on d

    olla

    rs

    Perc

    enta

    ge o

    f inf

    latio

    n

    Manufactures Oil Primary Inflation

    Solid macroeconomic environment

    7Source: INEGI / Bank of Mexico.

    Evolution of inflation, exports and international reserves in Mexico

    (2000- 2013)

    Reserves record: 176 billion dollars

    Exports record: 380 billion dollars

    Reserves

    Binational Center Library / Texas A&M International University

  • FDI flows into Mexico (1999-2013*)

    8Source: Ministry of Economy. General Directorate of Foreign Investment. */ Figures to September 2013.

    Record-high

    MUSD

    15,453

    35,188

    -

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    35,000

    40,000

    1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

    Binational Center Library / Texas A&M International University

  • 363

    4,404

    891 1,253

    4,432

    6,474 5,758

    8,256

    1,157

    8,464

    15,045

    12,139

    25,597

    -

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

    Mexicos FDI Outflows(million dollars)

    9Source: UNCTAD

    Record-high

    Binational Center Library / Texas A&M International University

  • 10

    A3Baa1

    Baa3

    BBB+ BBB+

    BBBBBB

    BBB-

    BBB+ BBB+

    BBBBBB

    BBB-

    Positive Ratings

    * Scores that are below the dotted line are investments with high degree of risk or speculation.

    Source: Fitch Ratings, Standar & Poors Rating Services, Moodys Investor Service.Binational Center Library / Texas A&M International University

  • 11Source: DataMarket, c J.P. Morgan Emerging Markets Bond Index .

    0

    500

    1000

    1500

    2000

    2500

    02/0

    1/20

    08

    02/0

    3/20

    08

    02/0

    5/20

    08

    02/0

    7/20

    08

    02/0

    9/20

    08

    02/1

    1/20

    08

    02/0

    1/20

    09

    02/0

    3/20

    09

    02/0

    5/20

    09

    02/0

    7/20

    09

    02/0

    9/20

    09

    02/1

    1/20

    09

    02/0

    1/20

    10

    02/0

    3/20

    10

    02/0

    5/20

    10

    02/0

    7/20

    10

    02/0

    9/20

    10

    02/1

    1/20

    10

    02/0

    1/20

    11

    02/0

    3/20

    11

    02/0

    5/20

    11

    02/0

    7/20

    11

    02/0

    9/20

    11

    02/1

    1/20

    11

    02/0

    1/20

    12

    02/0

    3/20

    12

    02/0

    5/20

    12

    02/0

    7/20

    12

    02/0

    9/20

    12

    02/1

    1/20

    12

    02/0

    1/20

    13

    02/0

    3/20

    13

    02/0

    5/20

    13

    02/0

    7/20

    13

    02/0

    9/20

    13

    02/1

    1/20

    13

    02/0

    1/20

    14

    EMBI plus (emerging markets)

    Mexico Argentina Brazil Turquia South AfricaTurkey

    Mexico in the EMBI+

    Binational Center Library / Texas A&M International University

  • Exportsplatform

    Internalmarket

    Humancapital

    Advancedmanufacture

    Macroeconomicenvironment

    Mexicoscompetitiveadvantages

    5 competitive advantages

    12

    Binational Center Library / Texas A&M International University

  • 8

    12

    1720

    45

    1

    Num

    bero

    fcou

    ntrie

    s

    Our FTAs give privileged access to 61% of the worlds GDP.

    Mexico has access to 45 countries through its free trade agreements(1.2 billion people).

    Number of countrieswith privileged access*

    We are commited to free trade

    13Sources: Brazil; China: Colombia:; United States: ; Chile: Direcon; Mexico: Ministry of Economy.

    Binational Center Library / Texas A&M International University

  • Source: SCT.

    LzaroCrdenas

    ManzanilloVeracruz

    Tampico

    Altamira

    Guanajuato

    Monterrey

    Guadalajara

    SLP

    14

    A country with great infrastructure

    Mexico has:

    63 border crossings. 68 international ports. 64 international airports. 16,700 miles of railroads. 230,000 miles of roads.

    Binational Center Library / Texas A&M International University

  • Fuentes: SCT/ US Department of Transportation.15

    A country part of NAFTA +50 border crossings

    with the US. NAFTA market= 18

    trillion USD. 16 trillion EU.

    Bilateral trade with theU.S.= 1 million dollarsper minute.

    1 million people and300 thousand vehiclescrossing the borderdaily.

    Binational Center Library / Texas A&M International University

  • Pacific Alliance

    16

    Elimination of 100% of tariffs. 92% immediately and the other 8% in the

    next 15 years or sooner. Elimination of visas between members. Platform for student and academic mobility. Unification of stock exchanges. Homologation of health and regulatory

    certifications.

    Binational Center Library / Texas A&M International University

  • Mxico And the TPP

    17

    The 12 countries of the TPP represent: 38% of global GDP. 23% of world exports. 28% of world imports. 11% of the worlds population.

    In negotiation

    P4 (Brunei, Chile,New Zealand andSingapore)

    Binational Center Library / Texas A&M International University

  • Exportsplatform

    Internalmarket

    Humancapital

    Advancedmanufacture

    Macroeconomicenvironment

    Mexicoscompetitiveadvantages

    5 competitive advantages

    18

    Binational Center Library / Texas A&M International University

  • Source: US Census Bureau: http://www.census.gov/population/international/data/idb/informationGateway.php ; INEGI, 2011; Population Projections forMexico 2005-2050, CONAPO. *Population (in millions) by age group.

    118 million inhabitants with a median of 27 years. 52 million in the labor force. According to forecasts, there will be more than 83 million people of

    productive age by 2020.

    Mexicos population pyramid (2030)*

    Male Female

    Demographics are on our side

    19

    Mexicos demographic bonus

    Binational Center Library / Texas A&M International University

  • Human capital: our main strength

    20

    The main reason to invest in Mexico isits human capitalJohn Rice, Vicepresident of GeneralElectric.

    The experience of Mexican engineersis one of the reasons we cotinue todevelop new projects in the countryYoung Ju Lee, President of Samsung.

    Mexico has unique competitiveadvantages, but its flexible and creativehuman capital is the one that highlightsthe mostPierre Beaudoin, President and CEO ofBombardier.

    Binational Center Library / Texas A&M International University

  • Exportsplatform

    Internalmarket

    Humancapital

    Advancedmanufacture

    Macroeconomicenvironment

    Mexicoscompetitiveadvantages

    5 competitive advantages

    21

    Binational Center Library / Texas A&M International University

  • Source: Competitive Alternatives 2012, KPMG; Global Benchmark Report 2011, of the Danish Industry Confederation;Manufacturing Outsourcing Cost Index 2010, Alix Partners.

    22

    According to KPMG, in 2011Mexico had an average costadvantage of 21% (over 19

    industries), compared to the US.

    Mex

    ico

    UK

    Net

    herla

    nds

    Can

    ad

    Fran

    ce

    Italy

    US

    A

    Ger

    man

    y

    Aus

    tralia

    Japa

    n

    21.0%

    5.5% 5.3% 5.0% 3.9%2.1%

    0% -0.1% -3.7% -9.4%%

    cos

    t adv

    anta

    ge re

    lativ

    e to

    the

    US

    Base

    line

    The Alix PartnersManufacturingOutsourcing CostIndex ranksMexico as thebest country(better thanBRICs).

    The mostcompetitivecountry in termsof costs andtaxes, accordingto GlobalBenchmarkReport.

    Most competitive total costs

    Binational Center Library / Texas A&M International University

  • Mexico ranks 20th inHarvard and MIT'sAtlas of EconomicComplexity.

    It acknowledges that Mexico can retain large amounts of productiveknowledge.

    Mexico manufactures and exports a large number of sophisticatedproducts.

    Manufacturing accounts for 80% of our exports.Source: INEGI/ Presidency/ Harvard and MIT, Atlas of Economic Complexity/ OECD. 23

    Mexico is an exporter of sophisticated products

    Binational Center Library / Texas A&M International University

  • A sophisticated economy

    No. Country % GDP1 South Korea 30.4%2 Germany 28.1%3 Mexico 17.2%4 China 15.0%5 France 13.2%6 Italy 12.9%7 United Kingdom 11.1%8 Japan 9.9%9 Canada 7.3%

    10 Turkey 7.0%11 South Africa 5.8%12 United States 5.1%13 India 4.5%14 Indonesia 4.1%15 Argentina 3.7%

    Medium and HighTech Exportsas a percentage of GDP (2011)

    24Source: IHS Data Global Insight; ProMxicos Analysis. Data in USD Real terms, 2005, considering de G20 countries.

    Medium Technology (MT): Specialty Chemicals Machinery, Equipment, Appliance Electrical Industrial Machinery Motor Vehicles & Parts Total Motorcycles & Transport. Equipment Railroads & Equipment

    High Technology (HT): Aircraft & Spacecraft Advanced materials Computers & Office Machinery Communication Equipment Medical, Precision & Optical

    Binational Center Library / Texas A&M International University

  • Automotive

    Mexico is the 8th vehicle producer in theworld. And the 4th exporter globally of new light

    vehicles in the world. We export almost three times more than Brazil

    and India combined. We are a strategic supplier to the North and Latin

    American automotive markets. In 2011, Mexico was the leading autoparts

    supplier to the United States. Eleven of every 100 light automobiles sold in the

    United States are manufactured in Mexico. 84 of the top 100 autoparts companies in the world

    have production facilities in Mexico.

    Source: OICA/ Global Trade Atlas/ AMIA/ Wards Automotive Reports/ AASA, 2011.25

    Fords plant in Hermosillo,Mexico, is the only facility in theworld to produce the newFusion model and the LincolnMKZ.

    Binational Center Library / Texas A&M International University

  • Electric-electronic

    26

    Mexico is the leading homeappliance exporter in LatinAmerica.

    And the 6th globally. It is the leading flat television screen

    exporter in the world. The second refrigerator exporter. The 4th global exporter of computers. 8 of the top 10 transnational electronics

    manufacturing services (CMs) haveoperations in Mexico.

    According to KPMG, electronicsassembling costs in Mexico are

    15% lower than in the UnitedStates.

    Source: Global Trade Atlas/ KPMG/ Manufacturer Market Insider.

    0 20 40 60 80 100 120

    MexicoRussiaBrazil

    CanadaThe Netherlands

    FranceUnited Kingdom

    ItalyUSA

    GermanyAustralia

    Japan

    Cost Index

    Electronics assembling(US=100)

    Binational Center Library / Texas A&M International University

  • Mining

    Fuente: The Silver Institute/ Cmara Minera de Mxico (CAMIMEX)/ Global Trade Atlas/Metals Economics Group/ INEGI.27

    According to Behre Dolbear,in 2013 Mexico was ranked5th best destination forinvestment in miningprojects.

    Mexico is the leading country in LatinAmerica and the 4th globally in termsof receiving investments for miningexploration in nonferrous minerals.

    Mexico is the leading silver producerand exporter globally.

    The second global fluorite producerand third bismuth producer.

    The second gold producer in LatinAmerica.

    Binational Center Library / Texas A&M International University

  • Mexicos major goals and strategies

    28

    ProMxico

    Mxico

    FDIattractionInternationalizationExportspromotion

    GENDER EQUITYKEEP GOVERNMENT CLOSE TO PEOPLEDEMOCRATIZATION OF PRODUCTIVITY

    3. Education

    4. Prosperity

    5. Responsibleglobal actor

    2. Inclusiveness

    1. Peace

    Binational Center Library / Texas A&M International University

  • EnhanceMexicos

    presence inNorth America

    Foster Mexicosbonds with

    Latin Americaand the

    Caribbean

    Diversifyexports to the

    Asia-Pacificregion

    EnhanceMxicos FTA

    with the EU

    ProtectMexicos

    interests in theglobal markets

    5 strategies for boosting our commerce

    PROMXICO

    29

    Binational Center Library / Texas A&M International University

  • What Do We Offer in ProMxico?

    30

    ProMxico

    Boosts activities aimed topresent an overview ofinternational business andtrade. It also seeks toencourage enterprises andstrategic sectors to reachinternational markets andpromote the country'simage.

    Assists clients to reach aspecific goal, throughtraining, personalassistance or consulting.

    Brings companies togetherand link them to private orpublic organizations andacademia, among others,with specific goals that areusually project-related.

    Simplifies the execution orincreases the appeal of aproject, whether for export,FDI or internationalization,through incentives, studiesor by opening markets.

    Development of programs and projectsDCC/ ACT Model/ Softlanding/ Aftercare/ Roadmaps/ Clusters articulation/ MOMA/ PROCEI

    Binational Center Library / Texas A&M International University

  • www.promexico.gob.mx

    carlos.marron@promexico.gob.mx

    @ProMexicoTW

    (713) 984-4598

    4507 San Jacinto St., 3rd. Floor

    Houston, TX 77004

    31

    Binational Center Library / Texas A&M International University

Recommended

View more >