Mexico’s competitive advantages as a target market
Competitive costs, a strong network of Free Trade Agreements (FTAs), labor and location are key drivers for global manufacturers to establish operations in Mexico. The strong network of Free Trade Agreements (FTAs) Mexico has, including the EU-Mexico Trade Agreement, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the United States-Mexico-Canada Agreement or USMCA (Tratado entre México, Estados Unidos y Canadá, T-MEC), promotes positive bilateral and multilateral trade relationships, which attract companies around the world.
The abovementioned factors support Mexico’s strategic location next to the United States. 47% of total US $569 billion in FDI Mexico received from 1999 -2019 originated from the United States. In turn, 52% of U.S. FDI in Mexico was destined to manufacturing.
Automotive, Aerospace and Medtech explained: overview and opportunities for Swiss SMEs
The Mexican automotive sector is the 6th largest vehicle producer globally and the 1st in Latin America. It has leveraged its location and logistics advantages as well as its highly skilled workforce to become the 4th largest vehicle exporter and the main supplier of autos to the U.S.
The Mexican aerospace sector grew 15% in 2019 and exported a total of US $9.5 billion, mainly to the U.S. Through manufacturing and a consolidated export platform, since 2004 Mexico has attracted over 350 certified companies in Baja California, Sonora, Chihuahua, Nuevo León and Querétaro, including Airbus, Boeing, Bombardier, General Electric and many more. Beyond its manufacturing and assembly capabilities, Mexico is leading the MRO (maintenance, repair and overhaul) services in North America.
The Mexican medical device sector employs 130,000 workers and is made up of 2,500 companies. Mexico is also the #1 exporter in the Latin America and the #1 supplier to the U.S., a US $155 billion market of surgery, odontology and veterinary instruments. Mexico itself is the 10th largest medical device market in the world worth US $5 billion with a mixed healthcare system, 70% of public healthcare and 30% private network.
Would you like to learn more? Download the in-depth report with the following topics:
- Mexico as a business location: introduction, economic overview, manufacturing supply chain, bilateral relationships
- Automotive sector: market overview, manufacturing clusters, production and exports, USMCA and the impact of Covid-19, Foreign Direct Investment
- Aerospace sector: market overview, manufacturing clusters, foreign direct investment, exports
- Medical Device Sector: public and private healthcare system, manufacturing clusters, exports and foreign direct investment, Mexico as a market opportunity
- Mexico: the next four years
- Opportunities for Swiss SMEs
- Relevant associations and events