top 10 opportunities in the automotive and auto parts industries in mexico
TRANSCRIPT
Top 10 opportunities in the Automotive and Auto
parts industries in Mexico
…AND HOW TO START SERVING THOSE CL IENTS FROM A COST COMPETIT IVE LOCATION
By Xavier Hurtado – Soft Landing and Start up Facilitator in Mexico
About American Industries Group
American Industries Group has helped over 200 global companies to successfully start up and grow distribution and
manufacturing operations throughout Mexico since 1976 through Site Selection, Incubator Programs, Administrative “Shelter”
services and Industrial Real Estate.
Reynosa
MonterreyGómez Palacio & Torreon
Camargo
El Paso
Gómez Farias
Chihuahua
San Luis Potosi
México D.F.
Juárez
Querétaro
Delicias
León
Monclova
Guadalajara
Saltillo
Regional Offices, Incubator Locations
Shelter and/or Real Estate Customers
SilaoLocations where we serve our clients in Mexico
Real Estate
We have built over 12 M Sq. Ft. Portfolio in
the most important industrial regions
throughout Mexico
Shelter & Start-up Services
• 50 Customers currently served
• Over 9,700 Customer’s headcount
• Over 30,000 trouble-free import and export
transactions per year
How we help companies to succeed in Mexico!
We are present at all stages of your industrial
business needs in Mexico:
We help you find the
right location for
your operations in
Mexico including the
coordination of
business agendas in
different regions.
Site Selection
Start up under an Incubator
Shelter Program
Expansion in other regions in Mexico
Supply Chain / Divisions Relocation
We take care of all start
up, legal, operational and
environmental permits,
human resources,
customs, logistics, fiscal,
accounting and all the
administrative part of the
business.
We help you grow your
business by working
together with industrial
clusters and
associations to promote
your business in
different regions in
Mexico. We help you to educate
and relocate your foreign
suppliers or other
divisions near your
operations in Mexico.
Contents
Automotive and Auto parts indicators and trends in Mexico
Top 10 Automotive OEMs and their production forecast
Top 10 Auto parts currently needed to support imports and
exports in Mexico
Mexico’s Industrial Incubator Program
Automotive and Auto parts indicators and trends in Mexico
Production of vehicles in the World, 1997-2013M
illio
nU
nit
s
Annual average rate of growth , 2013-2020Global Markets 3.8%
Developing Markets 5.8%Developed Markets 1.5%
58
% D
evel
op
ing
Mar
kets
in 2
02
0
Other
SoutheastAsian Nations
South America
India
Eastern Europe
China
Japan and KoreaWestern Europe
North America
Source: IHS Global Insight
Production Export/Domestic Market Ratio
Mexico exports up to 81.7% of its vehicle production output, therefore it becomes important tounderstand its free trade agreements network.
88.5%77.6%
88.7%
73%
87.2%
81.7%
13.9%
17.2%70.7%
82.5%
52.1%
19.1%
4.7%
0 5,000,000 10,000,000 15,000,000 20,000,000
Czech R.
UK
Spain
France
Canada
Mexico
Brazil
India
South Korea
Germany
Japan
USA
China
Un
its
Domestic
Exports
Source: ProMexico with information from OICA, Global Trade Atlas, ANFAVEA, AMIA and CAAM
In 2015 Mexico will offer savings of 16 % with regard to the manufacturing costs in USA, while China will have reduced its advantage in costs (considering “Total Landed Cost” to USA)*
Source: data and forecast of Alix Partners (Manufacturing Outsourcing Cost Index)
Share of the cost in USA
Mexico
India
China
USA
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Advantages in costs of manufacturing and transportation
*Total Landed Cost to USA includes manufacturing and transportation costs to USA
Automotive and Auto parts GDP, 2005-2013
Automotive and Auto parts GDP
*Rates were calculated between third quarter of 2010 and 2013Source: INA with information from INEGI
Annual Average Rate of Growth, 2010-2013*
Foreign Direct Investment and Free Trade Agreements
After the enactment of the North America Free Trade Agreement (NAFTA), Foreign Direct Investment
amounted more than 36 billion dollars.
Foreign Direct
Investment in
Automotive Sector
(million dollars)
Source: Kasso & Asociados with data from Mexican Ministry of Economy and Mexican Central Bank
North America
USA and Canada
Triangle of the North
Honduras, El Salvador
and Guatemala
Japan
European Union
European association of Free trade
Iceland, Liechtenstein, Norway and
Switzerland
Pacific AllianceColombia
Chile Peru
Mexico
Mexico’s Free Trade Agreements with access to 45 countries
*From 1997- 2012 data from AMIA for Mexico and OICA for USA and Canada. From 2013- 2019 forecast from IHS Global Insight.Source: INA with information from AMIA, IHS Global Insight and OICA
Light Vehicle Production in NAFTA Region
USA 65%
Canada 11%
Mexico 24%
NAFTA = 17.9
Million units
Mill
ion
un
its
Production of light vehicles in Mexico 2002-2019
Source: INA with information from AMIA
+ 47%
Source: INA with information from AMIA
Total 1,312
Total 2,423.1
85%68%
8%
13%6%5%
15%
Tho
usa
nd
Un
its
OtherEurope
Latin America
CanadaUSA
Exports of light vehicles per region 2002 vs 2013
Balance Trade of Automotive Sector in Mexico
During 2013, balance trade of automotive sector reached a surplus of 38,774 million dollars.
Source: Mexican Central Bank (BANXICO).* Automotive includes: 8702 - motor vehicles for the transport => 10 people; 8703 - tourism cars; 8704 - vehicles for transportation of goods; 8706 - Chasises with engine; 8707 - Bodies; 8708 - vehicle parts and accessories; and 8711 - motorcycles.
5,3
33
5,3
15
8,2
16
9,4
36
8,4
99
9,3
08
10
,55
4
10
,97
0
10
,90
6
9,0
88
9,8
02
8,8
44
9,0
89
13
,33
0
14
,41
1
15
,34
6
13
,20
2
23
,76
0
28
,91
7
32
,24
4
38
,77
4
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000M
illio
nd
olla
rs
Balance Trade of Automotive Sector in Mexico
Production and exports of heavy vehicles in Mexico, 2000-2013
Source: ANPACT
+ 60%
Mexico is the 5th largest exporter / importer of auto parts on a global level
World Trade of Auto Parts 2013
Source: ProMéxico with information from Global Trade Atlas
CountriesExports 2013 (million dollars)
% CountriesImports 2013 (million dollars)
%
Germany 130,898 15% USA 145,996 17%
USA 93,151 11% Germany 95,532 11%
China 81,936 9% China 49,161 6%
Japan 74,705 8% Canada 44,579 5%
Mexico 57,833 7% Mexico 38,897 5%
South Korea 41,474 5% United Kingdom 37,314 4%
France 39,197 4% France 34,364 4%
Italy 32,263 4% Spain 30,443 4%
Czech Republic 26,830 3% Russia 27,161 3%
Rest of the world 303,547 34% Rest of the world 336,207 40%
Total 881,834 100% Total 839,654 100%
Mexican Exports & Imports of Auto Parts per Country
Country Exports % Country Imports %USA 52,031 90.1% USA 20,872 54.6%
Canada 1,547 2.7% China 4,488 11.7%
Brazil 825 1.4% Japan 2,317 6.1%
Germany 398 0.7% Canada 1,774 4.6%
China 388 0.7% Germany 1,737 4.5%
United Kingdom 236 0.4% South Korea 1,713 4.3%
Japan 185 0.3% Brazil 606 1.6%
South Korea 184 0.3% Spain 539 1.4%
Thailand 148 0.3% Nicaragua 519 1.3%
Nicaragua 147 0.3% Taiwan 516 1.1%
Total 57,833 100% Total 38,897 100%
Balance trade 18,936
Exports and imports of auto parts in Mexico, 2013
Source: ProMéxico with information from Global Trade Atlas
Auto parts production by country 2013
During 2013 Mexico was the 6th largest producer of auto parts in the world with a production value of 76.8 billion dollars.
Source: ProMéxico with information from Global Insight and INEGI.
201481.5 Billion dollars
1°
2°
3°
4°
5°
7°
6°
8° 10°9° 13° 22°17°
Auto Parts Production and Forecast
Source: INA with information from INEGI, AMIA and IHS Global Insight
Auto Parts Production per State, 2013 (includes engines and transmissions)
Source: INA with information from INEGI
Bajío Zone26%
Source: INA with information from INEGI
Auto Parts Production per State, 2013 (includes engines and transmissions)
18.2%
14.2%
10.5%
3.6%
5.7%
6.5%7.3%
Bajio Zone 26%
Guanajuato Queretaro San Luis Potosi Aguascalientes Jalisco
Border Zone53.6%
Baja California Sonora Chihuahua Coahuila Nuevo Leon Tamaulipas
Automotive Industry in Mexico
Are you ready
to start
providing your
products and
services to any
or some of
these supply
chains?
This map shows the location of the light vehicles and heavy duty industry OEMs established throughout Mexico where more
than 400 supplier companies are expected to be fully operational before 2020 transforming Mexico in the 3rd exporter of light
vehicles at an international level.
Automotive Clusters and Supply Chain Integration
When will you start
the distribution or
even manufacturing
operations of your
core business in
those automotive
clusters?
This is a sample of an automotive regional cluster in Mexico, where the different OEMs integrate different suppliers to
assemble and export their units to other countries. In order to keep growing, this cluster needs key suppliers in forging,
casting, machining, plastic injection molding and tooling, among plenty of services to integrate and finish those products.
The same is happening in other automotive clusters throughout Mexico.
Top 10 Automotive OEMs and their production forecastARE YOU READY TO TAKE YOUR PIECE OF THIS GROWTH?
Forecast of Light Vehicle Production in Mexico, 2014-2019
Source: INA with information from IHS Global Insight
OEM 2014 2015 2016 2017 2018 2019
Audi 0 0 72,503 131,270 155,300 149,837
Chrysler 375,373 417,947 586,641 544,818 562,147 555,425
Fiat 90,160 67,014 24,366 0 0 0
Ford 471,551 456,968 432,410 355,867 442,292 530,676
General Motors 670,988 670,185 621,438 760,621 786,997 781,662
Honda 170,722 251,950 279,427 322,326 321,022 318,748
Mazda 89,696 178,972 200,129 253,245 257,192 236,283
Nissan 643,686 683,770 762,841 884,158 922,294 939,069
Toyota 54,682 71,557 154,723 160,235 168,589 164,398
Volkswagen 537,840 554,204 603,346 617,047 611,667 649,607
Total 3,104,698 3,352,567 3,737,824 4,029,587 4,227,500 4,325,705
Forecast of production of light vehicles in Mexico, 2014-2019
(units)
OEM 2014 2015 2016 2017 2018 2019
Nissan 643,686 683,770 762,841 884,158 922,294 939,069
General Motors 670,988 670,185 621,438 760,621 786,997 781,662
Volkswagen 537,840 554,204 603,346 617,047 611,667 649,607
Chrysler 375,373 417,947 586,641 544,818 562,147 555,425
Ford 471,551 456,968 432,410 355,867 442,292 530,676
Honda 170,722 251,950 279,427 322,326 321,022 318,748
Mazda 89,696 178,972 200,129 253,245 257,192 236,283
Toyota 54,682 71,557 154,723 160,235 168,589 164,398
Audi 0 0 72,503 131,270 155,300 149,837
Fiat 90,160 67,014 24,366 0 0 0
Total 3,104,698 3,352,567 3,737,824 4,029,587 4,227,500 4,325,705
Fuente: IHS Global Insight
Pronóstico de producción de vehículos ligeros en México, 2014-2019
(unidades)
Additionally, BMW and KIA MOTORS will
be adding their
production forecast
starting from 2016!
Light Vehicle Sales in Mexico per OEM
Source: INA with information from AMIA
Total 1,099.9
Total 611.2
Total 754.9Total 820.4
Total 905.9
Total 1,063.3
Main OEM’s and Tier One Supplier with Design Engineering Centers in Mexico
Enterprise Number of Engineers
FORD 800
Chrysler 500
General Motors 600
Volkswagen 600
Nissan 700
Delphi 1,500
Continental 700
Faurecia 300
Top 10 auto parts needed in Mexico to support imports and exportsARE YOU READY TO TAKE YOUR PIECE OF THIS GROWTH?
Main Auto Parts Imported, 2013
Source: INA with information from Global Trade Atlas
Auto PartsTOTAL 2012
(Million USD)
TOTAL 2013
( Million USD)
Growth
(%)
Wires and cables of copper, aluminum and their alloys 1,616 1,786 10%
Seats for vehicles and their parts 1,082 1,222 13%
Tires 1,659 1,630 -2%
Harnesses 381 904 137%
Engines for Vehicles, cylinder apacity between 1,000 cm3 257 663 158%
Parts for steering system, including columns (except axles) 563 554 -2%
Mechanisms for disc brakes and their parts, including
booster and its parts 455 534 17%
Seat belts and retractors devices and their parts 378 462 22%
Driveshafts and crankshafts 372 423 14%
TOTAL IMPORTS 36,431 38,897 7%
Main auto parts imported by Mexico, 2012-2013
Main Auto Parts Exported, 2013
Source: INA with information from Global Trade Atlas
Auto PartsTOTAL 2012
(Million USD)
TOTAL 2013
( Million USD)
Growth
(%)
Harnesses 4,981 5,970 20%
Seats for vehicles and their parts 3,993 4,531 13%
Airbags (security system) 1,177 1,452 23%
Radio-broadcast receivers, including those with bluethooth
and USB ports 910 1,164 28%
Electric conductors of copper, aluminum and their alloys for
a voltage not exceeding 80v 934 1,101 18%
Automatic gearboxes 848 994 17%
Catalytic converters 659 833 26%
Drive axles with differential, whether or not provided with
other transmission components and their parts 676 792 17%
Steering wheels 588 655 12%
TOTAL EXPORTS 52,054 57,833 11%
Main auto parts exported by Mexico, 2012-2013
Mexico’s Industrial Incubator Program
DESIGNED TO MAKE IT EASY FOR YOUR COMPANY TO START BUSINESSOPERATIONS TO SERVE THE AUTOMOTIVE OR AUTO PARTS INDUSTRY INMEXICO.
Mexico’s Industrial Incubator Program: what it is
It is a program that got specially designed for companies that have no previous experience in doing business different regionsthroughout Mexico.
When you sign up for this program, you will get all theprivileges, benefits and incentives as if you were alreadyan expert in doing business in Mexico with a large andmature operation.
Take this opportunity as a new competitive edge for yourcompany where you will be conquering new markets witha very unique advantage: being able to focus on yourclients and production!
What are the benefits that you will get?
Mexico’s Industrial Incubator Program: Benefits
You will get assistance with:
B2B meetings and business agenda coordination with aerospace,automotive and metal mechanic clusters to help you promote yourproducts and services.
Real estate space: starting from 5,000 Sq Ft Freedom to start doing business in Mexico without a Legal Entity! Legal and operational permits: fast start up in 9 weeksHuman resources: we will help you find and recruit your sales, distribution
and operations staff (starting from 5 employees).Government incentives negotiation on technical training.Customs: we will help you get the maximum tariffs savings from the free
trade agreements with 45 countries for your imports and exports. Fiscal and accounting management +
NO INCOME TAX for the first 4 years NO VAT effect on cash flow
NO Start up or Exit FEEsNO risks: no legal or administrative liabilities
Starting at an estimated fully loaded cost per hour of $18 USD peremployee including labor, logistics, real estate and utilities.
Mexico’s Industrial Incubator Program: Stages
The incubator program will help you to take your first steps in Mexico entirely focused on sales, customer service and
production and you will not face any legal or administrative risks or liabilities on your start up stage.
Request your
Incubator
Application
You will get a tailored evaluation and roadmap to start operations in the regions that there might be potential for your
business to grow in Mexico.
You will get a tailored cost model where you will be able to compare the total cost of production per hour in each region.
Get a
Business
Agenda in
Mexico
Start up
(9 weeks)
At this point we will coordinate business agendas in the selected regions for your operations in Mexico with industrial
associations and clusters.
As part of the agenda, you will be able to visit the Incubator’s real estate facilities where you will be able to operate.
Additionally, you will get a presentation of the different enabling services that you will get as part of the Incubator and
you will be able to meet with government officials.
At this stage you will get all permits for your operations.
You will get your human resources hired and organized (including payroll management).
You will get your machinery and equipment installed.
You will get all your customs & logistics set up. You will get all paperwork and administrative tasks done so that you can start serving your clients from your new location.
Sharing Responsibilities under the Incubator Program
•Management to direct operations.• Machinery & equipment.• Raw materials.• Full control over distribution, production and quality.
Manufacturing
Maintenance
Your CompanyAmerican Industries
Engineering
Design
Quality
Scheduling
Raw Materials
Inventory
Management
Purchasing
Direct Mat
Purchasing
Indirect Mat
Import & Export
Customs
Duties Optimization
Logistics
Operational
Permits
Accounting
Fiscal
Accounts Payables
& Receivable
Human
Resources
Recruitment
& Selection
Training
compliance
Salary & Benefits
Administration
Payroll
Labor
Management
Union Relation
General Manager
General
Administration
Environmental
compliance
Expat Support
Sorting & Kitting LabelingJust-In-Time
delivery to clients
This diagram shows the functions that you will need to perform in your new business operations in Mexico to serve your clients. TheIncubator program takes full responsibility of the blue side of the business.
Mexico’s Industrial Incubator Program: How to qualify
You can qualify for this program if you want to start any of the following operations
Just-In-Time or distribution operation
Assembly operation
Kitting & labeling operation
Manufacturing operation
Or if you fit into any of these categories
You have little or no experience in doing business in Mexico
You don’t have a legal presence in Mexico
You don’t require a large facility
You want to experience doing business in Mexico for the first time with a low risk framework
You want to share costs with other small operations.
Are you pre-qualified for the Incubator Program?
What are the Next Steps?
Request your free Application
Form to apply for the Incubator
Program today at:
www.AmericanIndustriesGroup.com/incubator
Thank Youwww.AmericanIndustriesGroup.com
For more information contact:
José Nuñez / Myrna de las Casas
Soft Landing & Start Up Facilitator in Mexico
US Toll Free +1 877 698 3905
Mexico +52 614 439-3631