“Latin Fashion”. Why many companies like producing in Mexico

“Latin Fashion”. Why many companies like producing in Mexico

Strategic geographical position, liberism, low manpower costs, favourable internal market and economic reforms are remarkable attraction factors for enterprises.

At present, Mexico is the most important Latin America country after Brazil and the fourteenth economy in the world, besides to being the biggest TV sets producer, the third PC producer and the second car producer – after USA – in America. According to Goldman Sachs and Nomura evaluations, in 2020 Mexico will be one of the most important worldwide economies.

So it’s clear why the companies deciding to outsource their production in this country are continuously increasing, for example the Italian companies Pirelli, Fiat, Enel Green Power, Barilla, Ferrero, Technint, and several automotive companies such as Mazda and Toyota, Volkswagen and Audi.

The special geographical position, between Latin America and USA, andfree trade agreements signed with over 40 countries in North and Latin America, Europe and Japan, factors making Mexico the most successful springboard for companies willing to expand themselves into the worldwide market, have a positive impact.
Particularly, in 1994, North American Free Trade Agreement connected Mexican and Canadian economies very closely, while in 2012 Pacific Alliance facilitated the goods, services, capitals and people trades among Mexico, Columbia, Peru and Chile.

In addition, Mexico has a remarkable availability of highly qualified manpower having salaries lower than Chinese ones by about 20%, besides to a very favourable internal market. With a population of 120 millions of people, high urbanization levels, a continuously increasing life standard and high and medium income class, is an attractive target for consumer goods, including Made in Italy products mainly aimed at the most well- off consumers.

After Enrique Peña Nieto’s assignment in 2012, enterprises have benefited from the numerous reforms on the new government leader’s behalf, such as theunique tax suppression and a bureaucracy streamlining. Besides, several industrial fleets and specialized technological centres have been built, and subsidies on local institutions’ behalf have been guaranteed for companies that are going to develop environmental or social projects.

Therefore a manager operating in the Mexican market must be prepared to face the important changes that are looking to take place in the nearest future, proving to possess a solid large scale training, linked to a deep knowledge of the social – cultural situation of the country and its business environment.

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