MARKET RESEARCH COUNTRY REPORT MEXICO
MARKET RESEARCH COUNTRY REPORT
MEXICO
CONTENTS
Main Industry SectorsEconomic OverviewForeign Direct Investment [FDI]FDI Government MeasuresCountry Strong PointsCountry Weak PointsForeign Trade Overview
MAIN INDUSTRY SECTORS Agriculture accounts for approximately 4% of the GDP and employs
13.5% of the active population, however, the scarcity of credit
continues to penalize this sector.
Mexico ranks amongst the world's largest producers of coffee, sugar,
corn, oranges, avocadoes and limes.
Mexico is the world's 5th biggest producer of beer and its number
two exporter.
It is amongst the world's leading producers of many minerals,
including silver, fluorite, zinc and mercury, and its oil and gas
reserves are one of its most precious possessions: Mexico is the
world's fifth largest producer of oil.
The oil company PEMEX is the second most powerful company in
Latin America, according to the industry journal América Economŕ a.
Cattle farming and fishing are also important economic activities.
MAIN INDUSTRY SECTORS
The aerospace sector has grown sharply in the last five years, due to
the presences of almost 190 companies, such as Bombardier, Goodrich,
the Safran group and Honeywell, which together employ 30 000 people.
Mexico is also one of the 10th major car producers.
The hi-tech, information and software development sectors are also
experiencing a real momentum, driven by the quality of the workforce,
clusters and low operating costs, which allow for the establishment of
call centers.
The tertiary sector contributes to around 60% of the GDP and the
construction sector is coming up again due to real estate investments.
ECONOMIC OVERVIEW
Mexico became the 12th world economic power. Although the
GDP fell sharply in 2009 (-6.5%), the GDP is predicted to rise
by about 4% in 2010.
Resumption of exports, especially car sales and US tourism
are encouraging signs.
The general economic outlook is relatively good. According to
the different rating agencies, Mexico enjoys the investment
grade status.
The Doing Business 2010 report considers it the best country
to do business in in Latin America; nevertheless, the growing
security issues discourage investments and tourism.
The corruption and inefficiency of Mexican bureaucracy
are also among the country's weaknesses
FOREIGN DIRECT INVESTMENT [FDI]
Mexico is one of the emerging countries most open to foreign direct
investment.
Over the last few years, its competitiveness has been slowed down
due to the increase of organized crime and a lack of reforms in the
energy, professional and financial fields.
The areas where foreign investments are concentrated the most are the
border towns with the United States (where assembly factories are
located), as well as the capital.
The Yucatan peninsula continues to receive foreign investments
thanks to its tourism appeal.
These investments come especially from the United States
and Spain (mainly from the banking sector).
The sectors receiving significant foreign investments are
finance, automobile industry and electronics services.
FOREIGN DIRECT INVESTMENT [FDI]
The major investors in Mexico were the Netherlands with 7.461
million dollars, or 52% of total FDI and the United States with up to
30% for the year 2010.
This reflects Heineken's significant acquisition of the beer operations
of the Mexican group Femsa. Spain, on the other hand, has significantly
reduced its investments in the country.
The 14.362 million dollars of FDI in 2010, Mexico's appeal has again
increased, compared to the last two years.
According to the 2010 global competitiveness report of the
World Economic Forum, Mexico ranked 28th in terms of
foreign investor confidence.
FDI GOVERNMENT MEASURES The Mexican Government has created an open and safe environment for
foreign investors.
The recently undertaken economic policies should allow investors to
manage the safety of their operations despite the unfavorable global
external environment.
Public treasury funds have been made available to private companies
that have been heavily affected by the crisis.
In November 2008, the Mexican government saved the Vitro company,
one of the world's biggest glass producers, which was having liquidity
problems because of its debts.
The amount disbursed to save it was evaluated at 100 bn $.
The cement corporation, Cemex, in turn registerd a 15 bn $
debt, a debt which is higher than the value of the company,
due to the collapse of the world construction sector.
COUNTRY STRONG POINTS
Mexico forms a bridge between North America and Latin
America due to its geographical location;
Mexico has an extensive variety of natural resources
allowing for the development of all types of industries at
competitive prices;
Mexico is very open to direct foreign investments;
Labor costs are not high and in general, there is a skilled
labor force;
Positive structural reforms have been made during the
current presidential term;
Mexico is the world's 8th tourist destination.
COUNTRY WEAK POINTS
The country depends excessively on its partnership with the
United States;
There is a high level of corruption;
During the last few months, violence has increased especially the
drug cartels;
The country is encountering significant structural problems
(economic and social).
FOREIGN TRADE OVERVIEW
Mexico is one of the countries that most depends on foreign
trade. Foreign trade represents around 60% of its GDP.
Mexico has 11 free-trade agreements with 43 countries of the
world.
It is a member of NAFTA - the free-trade agreement that
unifies the United States, Mexico and Canada, since 1994.
The country signed a free trade agreement with the
European Union in 2000 and a commercial agreement with
Japan came into force in April 2005.
FOREIGN TRADE OVERVIEW
The United States buys 80% of Mexico's exports. Its main
export partners are the NAFTA and the European Union.
The main export goods are electrical and electronic
equipment, vehicles, mineral fuels, oil and machinery.
Its three main import partners are the NAFTA, China and
Japan.
It mainly imports electrical and electronics equipment,
machinery, vehicles and plastic products.
In 2010, Mexican exports increased by 32% on the previous
year.
During the same period, international car sales increased
sharply by 76.8%, which may also represent a threat of
dependency for the Mexican economy.
RELATED MEXICO REPORTS
Market Opportunities of products and Services in
Mexico
Export and investment sector opportunities in Mexico
Overview of Trade Regulations, Customs and Standards
in Mexico
Mexican Investment guide for beginners
Business and Project Financing in Mexico
Business Travel Advisory in Mexico
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