Why not Mexico? Opportunities for the Power Transmission Industry in Mexico

25 October 2006

Right now, the economic world is looking at the so called BRIC* states and their future market opportunities. But, apart from these there are some other interesting countries that may be worth to take a look at. One of them is Mexico.

The power distribution industry can take advantage of Mexico’s growing economy in at least two ways. On the one hand, the Mexican industry offers a big market potential in the OES and IAM markets in industries with a high demand for spare parts like the above mentioned. All these markets are continuously growing. On the other hand, Mexico can be used as an entrance for OEM products to the still robust US market. In addition to a lot of advantages due to the NAFTA membership, Mexico offers plenty of cheap labour.

Over the last years, the Mexican economy has constantly grown at three to four percent. The GDP 2005 was more than 768 billion USD, thus Mexico is still the largest Latin-American economy. The per capita income of the 107 million Mexicans is at about 7,300 USD. Still, the income distribution is highly unequal. Except for some regions in the South, the political and economic system has proven to be stable.

In 2005, the industrial production reached 177 billion USD (+2.5%) and was the 13th largest worldwide. Important industries are chemical and petrochemical (app. 48. billion USD), food and beverage (app. 45 billion USD), automotive (app. 37 billion) and electronics (app. 16 billion USD). The major part of industrial production can be found in and around Mexico City, Nuevo Leon und Jalisco.

Mexico exported goods for more than 213 billion USD. Main export products are cars and automotive parts as well as electrical parts. This high export rate was enabled through the implementation of the NAFTA in 1994. Nowadays, Mexico has free trade agreements with over 40 countries worldwide, but the USA are still by far the most important trading partner. More than 70% of the external trade is done with the USA.

Recent surveys carried out by Schlegel and Partners in Mexico showed that the Mexican industry is very pro European. Mexicans are usually friendly, positive thinking and open-minded. In order to set up a successful business relationship, it helps a lot to build up a personal relation with your business partner. Nevertheless, you should be aware that some things are done the Mexican way. Mexicans are used to do several things at a time, thus interruptions are not seen as rude. Especially being on time is not an important issue. Meetings usually start up to 15 minutes late. The word mañana expresses the flexibility in handling time and meeting deadlines.

So, if you think of going abroad and are willing to spend time, then Mexico might be worth a closer look.

*(Brazil, Russia, India, China)
Your contact person
Ursula Hosselmann
Director Engineering Markets

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