Export Knowhow

Mexico: A growth market and international transport hub

A key location and international trade agreements make Mexico an intriguing prospect for Swiss businesses. Benjamin Werenfels, Consultant for Mexico, and Rubén Araiza Díaz, Head of the Business Hub Mexico, tell us why local representation is so crucial when entering the market.

Mexiko City

Mexico is a growth market. Thanks to its geographic location, it is also a crucial international transport hub. The country is fully integrated into the supply chains between North, Central and South America and has concluded 12 free trade agreements with a total of 46 countries. Its active role in numerous international organizations such as the WTO and the OECD and its membership of the G20 group make Mexico an interesting prospect economically.

130 million consumers

“Right now, Mexico is in fifteenth place in the rankings of the world’s biggest economies, but it is growing rapidly and its 130 million people are keen to get their hands on Swiss products”, explains Rubén Araiza with conviction. Within the EFTA, Switzerland is already Mexico’s most important trading partner.

Boom industries such as automotive, aerospace, medtech, pharmaceuticals and consumer goods are particularly interesting for Swiss companies. “Audi and BMW have expanded their presence in Mexico, and this represents an opportunity for all suppliers to become part of the relevant supply chain”, maintains Benjamin Werenfels. Of particular significance here are the primary hubs in the north and center of the country: Baja California, Chihuana, Nuevo León, Sonora and Querétaro.

The Swiss Business Hub is here to help

Preparations for entering the Mexican market vary depending on the industry. Speaking from experience, Rubén Araiza advises all interested Swiss companies to review the market thoroughly and to determine the main product or service to be offered in advance. Particular consideration should be given to cost structure, prices, margins and the general conditions of sale and delivery to Mexico. It is for precisely this purpose that the Swiss Business Hub offers market analyses and studies.

“The Swiss Business Hub can provide assistance to Swiss export companies at any time. We can help with the creation of a broad development plan and with the achievement of specific commercial objectives”, says Rubén Araiza, summarizing the support provided.

Anyone who is considering entering the Mexican market should plan a business trip – ideally to coincide with a trade show. Rubén Araiza recommends that companies pay particular attention to developing their representation. As a general rule, they will need a manager on site as well as contacts and meetings with suppliers and industry associations: “When seeking a business partner, it makes sense to invest time in a professional process in order to ultimately establish a presence in the targeted channels and regions of the country. Making good decisions from far away is extremely difficult.”

Time and local consultancy

Selecting suitable sales partners and/or agents therefore takes time and often also requires a consultation locally. Rubén Araiza also lists the following points as prerequisites for a market entry with long-term success: “It’s important to provide training sessions, information and marketing support for merchants and agents. Beyond this, companies also have to consider protecting their trademarks, logos and other intellectual property locally. They also need to ensure that sales partners are on a solid footing financially. Before any contracts are signed, it is worthwhile seeking advice from local legal, accounting or tax experts.”

Challenges of bureaucracy and culture

“Bureaucracy can certainly be a challenge”, says Rubén Araiza, pinpointing one difficult aspect. Many processes are likely to take longer, so Swiss companies often have to be patient. Nevertheless, Rubén Araiza warns against interpreting delays as a lack of interest: “It is important to understand the people. There is less personal distance than Swiss business people are used to. Here in Mexico, deals are struck not only in meetings, but also in restaurants.”

Support with export

Would you like to explore your business opportunities in Mexico without obligation? Contact Benjamin Werenfels today to discuss your export project. At Switzerland Global Enterprise, we offer you initial free country consulting sessions, prepare more detailed market and competition analyses oriented to your needs, support you in your search for the right business partner and inform you about legal regulations.

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