Top 10 opportunities in
the Automotive and Auto
parts industries in
Mexico
… A N D H OW TO S TA RT S E RVI N G T H OSE C L I ENTS F ROM A C O ST C O MP ETI TI VE LO C ATI ON
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.
El Paso
Shelter & Start-up Services
Juárez
Gómez Farias
Chihuahua
Delicias
Monclova
Camargo
Gómez Palacio & Torreon
Reynosa
Monterrey
Saltillo
San Luis Potosi
Guadalajara
León
Locations where we serve
our clients in Mexico
Silao
Regional Offices, Incubator Locations
Shelter and/or Real Estate Customers
Querétaro
México D.F.
•
•
•
53 Customers currently served
Over 11,700 Customer’s headcount
Over 30,000 trouble-free import and export
transactions per year
Real Estate
We have built over 12 M Sq. Ft. Portfolio in
the most important industrial regions
throughout Mexico
How we help companies to succeed in Mexico!
We are present at all stages of your industrial
business needs in Mexico:
Site
Selection
We help you find the
right location for
your operations in
Mexico including the
coordination of
business agendas in
different regions.
Start up under an
Incubator
Shelter Program
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.
Expansion in other
regions in Mexico
We help you grow your
business by working
together with industrial
clusters and
associations to promote
your business in
different regions in
Mexico.
Supply Chain /
Divisions Relocation
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
Million Units
Annual average rate of growth , 2013-2020
Global Markets 3.8%
Developing Markets 5.8%
Developed Markets 1.5%
Other
Southeast
Asian Nations
South
America
India
Eastern
Europe
China
Japan and
Korea
Western
Europe
North
America
Source: IHS Global Insight
58 % Developing Markets in 2020
Production of vehicles in the World, 1997-2013
Production Export/Domestic Market Ratio
Mexico exports up to 81.7% of its vehicle production output, therefore it becomes important to
understand its free trade agreements network.
China
4.7%
USA
19.1%
Japan
52.1%
Germany
India
82.5%
70.7%
17.2%
Brazil
13.9%
Units
South Korea
Mexico
81.7%
87.2%
73%
88.7%
Canada
France
Spain
UK
Domestic
Exports
77.6%
88.5%
Czech R.
0
5,000,000
10,000,000
15,000,000
Source: ProMexico with information from OICA, Global Trade Atlas, ANFAVEA, AMIA and CAAM
20,000,000
Advantages in costs of manufacturing and transportation
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)*
Share of the cost in USA
1.05
1.00
0.95
0.90
0.85
0.80
0.75
0.70
0.65
0.60
USA
China
Mexico
India
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
Source: data and forecast of Alix Partners (Manufacturing Outsourcing Cost Index)
*Total Landed Cost to USA includes manufacturing and transportation costs to USA
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)
Mexico’s Free Trade Agreements
with access to 45 countries
European association of Free trade
Iceland, Liechtenstein, Norway and
Switzerland
European Union
North America
USA and Canada
Japan
Triangle of the North
Honduras, El Salvador
and Guatemala
Pacific Alliance
Colombia
Chile
Peru
Mexico
Source: Kasso & Asociados with data from Mexican Ministry of Economy and Mexican Central Bank
Light Vehicle Production in NAFTA Region
Million units
USA 65%
Canada 11%
Mexico 24%
NAFTA = 17.9
Million units
*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
Production of light vehicles in Mexico 2002-2019
+ 47%
Source: INA with information from AMIA
Balance Trade of Automotive Sector in Mexico
During 2013, balance trade of automotive sector reached a surplus of 38,774 million dollars.
Balance Trade of Automotive Sector in Mexico
45,000
35,000
30,000
25,000
38,774
32,244
28,917
23,760
13,202
15,346
14,411
13,330
9,089
8,844
9,802
9,088
10,906
10,970
10,554
9,308
8,499
5,000
9,436
10,000
8,216
15,000
5,315
20,000
5,333
Million dollars
40,000
-
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.
Production and exports of heavy vehicles in Mexico, 2000-2013
+ 60%
Source: ANPACT
Auto Parts Production and Forecast
Source: INA with information from INEGI, AMIA and IHS Global Insight
Auto Parts Production per State, 2016 (includes engines and transmissions)
Bajío Zone
26%
Source: INA with information from INEGI
Auto Parts Production per State, 2013 (includes engines and transmissions)
3.6%
18.2%
14.2%
10.5%
5.7%
Guanajuato
Queretaro
San Luis Potosi
Aguascalientes
Jalisco
Source: INA with information from INEGI
7.3%
6.5%
Baja California
Sonora
Chihuahua
Coahuila
Nuevo Leon
Tamaulipas
Automotive Industry in Mexico
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.
Are you ready
to start
providing your
products and
services to any
or some of
these supply
chains?
Automotive Clusters and Supply Chain Integration
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.
When will you start
the distribution or
even manufacturing
operations of your
core business in
those automotive
clusters?
Top 10 Automotive OEMs and
their production forecast
ARE YOU READY TO TAKE YOUR PIECE OF THIS GROWTH?
Forecast of Light Vehicle Production in Mexico, 2014-2019
Forecast of production of light vehicles in Mexico, 2014-2019
(units)
OEM
Nissan
General Motors
Volkswagen
Chrysler
Ford
Honda
Mazda
Toyota
Audi
Fiat
Total
2014
643,686
670,988
537,840
375,373
471,551
170,722
89,696
54,682
0
90,160
3,104,698
2015
683,770
670,185
554,204
417,947
456,968
251,950
178,972
71,557
0
67,014
3,352,567
Source: INA with information from IHS Global Insight
2016
762,841
621,438
603,346
586,641
432,410
279,427
200,129
154,723
72,503
24,366
3,737,824
2017
884,158
760,621
617,047
544,818
355,867
322,326
253,245
160,235
131,270
0
4,029,587
2018
922,294
786,997
611,667
562,147
442,292
321,022
257,192
168,589
155,300
0
4,227,500
2019
939,069
781,662
649,607
555,425
530,676
318,748
236,283
164,398
149,837
0
4,325,705
Additionally,
BMW and KIA
MOTORS will
be adding
their
production
forecast
starting from
2016!
Light Vehicle Sales in Mexico per OEM
Total 1,099.9
Total 1,063.3
Total 905.9
Total 820.4
Total 754.9
Total 611.2
Source: INA with information from AMIA
Main OEM’s and Tier One Supplier with Design Engineering Centers in Mexico
Enterprise
FORD
Chrysler
General Motors
Volkswagen
Nissan
Delphi
Continental
Faurecia
Number of Engineers
800
500
600
600
700
1,500
700
300
Top 10 auto parts needed in Mexico
to support imports and exports
ARE YOU READY TO TAKE YOUR PIECE OF THIS GROWTH?
Mexico’s Industrial
Incubator Program
D E S I G N E D T O M A K E I T E A S Y F O R Y O U R C O M PA N Y T O S TA RT B U S I N E S S
O P E R AT I O N S T O S E R V E T H E A U T O M O T I V E O R A U T O PA RT S I N D U S T RY I N
MEXICO.
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 regions
throughout Mexico.
When you sign up for this program, you will get all the
privileges, benefits and incentives as if you were already
an expert in doing business in Mexico with a large and
mature operation.
Take this opportunity as a new competitive edge for your
company where you will be conquering new markets with
a very unique advantage: being able to focus on your
clients 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 your
products 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 weeks
Human 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 FEEs
NO risks: no legal or administrative liabilities
Starting at an estimated fully loaded cost per hour of $18 USD per
employee 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
Get a
Business
Agenda in
Mexico
Start up
(9 weeks)
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.
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
This diagram shows the functions that you will need to perform in your new business operations in Mexico to serve your clients. The
Incubator program takes full responsibility of the blue side of the business.
General Manager
Manufacturing
Engineering
Quality
Raw Materials
General
Administration
Human
Resources
Maintenance
Design
Scheduling
Inventory
Management
Operational
Permits
Recruitment
& Selection
Sorting & Kitting
Labeling
Just-In-Time
delivery to clients
Purchasing
Direct Mat
Environmental
compliance
Training
compliance
Purchasing
Indirect Mat
Accounting
Salary & Benefits
Administration
Import & Export
Fiscal
Payroll
Customs
Accounts Payables
& Receivable
Labor
Management
•Management to direct operations.
• Machinery & equipment.
• Raw materials.
• Full control over distribution,
production and quality.
Your Company
Duties Optimization
Union Relation
Logistics
Expat Support
American Industries
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
For more information contact:
[email protected]
US Toll Free +1 877 698 3905 | Mexico +52 614 439-3631
Thank You
www.AmericanIndustriesGroup.com