Mexico manufacturing achievements
By Adina Moloman
Sources: Financial Times, Special Report on Mexico
Mexico faces several challenges to achieving a more solid macroeconomic framework.
Its main goal of being among the world’s leading exporting nations is becoming a reality by diversifying its range of export products (other than oil which were around 80% of the total exports two decades ago) and export markets.
“Diversity and openness” are the key to success. Diversity in export products, from agricultural products to automotive and aerospace components and openness is represented by the variety in Mexico trade partners such as Central and South America as well as with Asia, besides the US, which is still the leading trade partner. Mexico now has trade agreements with 44 countries, as many as China, and almost four times as Brazil. Since the Free trade agreement with US and Canada in 1994, Mexico has negotiated 11 other tariff-reduction accords and achieved agreements with 44 other countries.
Mexico has been climbing the manufacturing chain, now days the Mexican Maquiladoras are manufacturing more sophisticated goods, like electronic, automotive and aerospace goods which need high standards of precision and quality. Mexico manufacturing has taken a big step from manufacture to engineering and design by providing engineers to help design components used by word leading car manufacturers and industrial engineering equipment.
Interesting facts are that the auto sector represents 28 per cent of manufacturing exports, more than oil, tourism, or workers’ remittances home from abroad. Mexico was the world’s eighth-largest car producer in 2011, surpassing Spain and other consolidated auto manufacturers.
Mexico begun to gain market share of total US imports, the world’s largest import market, and accounted for more than 12% of all US, non-oil imports.
There is still a lot to accomplish to deepen local supply chains for transnational companies manufacturing in Mexico. Most of the local suppliers agree about one thing: more incentives from the government are needed. Investors all over the world are considering Mexico as investment.
Siemens for instance is huge investor and is considering Mexico as a platform for manufacturing its high-tension energy transmission equipment in the near future.
