The German automotive industry in Mexico. Automotive Logistics, Mexico City Andreas Müller
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1 The German automotive industry in Mexico Automotive Logistics, Mexico City Andreas Müller
2 1. Relation between Mexico and Germany 2. Mexican auto industry importance for Germany 3. Foreign Trade: Import and Export 4. NAFTA 5. CAMEXA brings German strengths to Mexico 6. Investment in Mexico: How German companies are doing business in Mexico
3 CAMEXA: Building economic relations Mexico Germany Foundation of the German Chamber of Commerce in 1929 Representating the interest of 810 companies with relation to Germany in Mexico Representing the interest of German companies represented by Business asociations CAMEXA forms part of an international network of 90 Chambers of Commerce Abroad (AHK) all over the world. Four main areas of expertise: 1. Platform for our membership 2. Helping German companies in their soft-landing in Mexico 3. Helping Mexican companies to enter the German market (trade shows) 4. Training solutions and dual vocational education 3
4 Mexico Germany: Status Quo 2,000 registered companies with german capital in Mexico accumulating ca.35 billion US Dollar of historic investment German Small and Medium-sized Enterprises are situated in the following sectors: - Automotive manufacturing and auto parts industry - Electronic engineering - Pharmaceutical industry - Chemical industry German companies are located mainly in CDMX, QTO, GTO, PUE, Jalisco, MTY and Saltillo German companies employ around 150,000 people in Mexico 4
5 Members of the German Chamber of Commerce (extract)
6 Export share of produced passenger cars in Mexico 3.1% Germany Brazil 1.6% 1.6% Colombia Others 10.6% Canada 8.6% 75.3% USA Source: AMIA, December
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8 The latest OEM investments in Mexico OEM s Total investment in US-Dollar (billion) Start of production Audi 1.3 bn BMW 1.0 bn KIA 1.0 bn Nissan-Daimler 1.4 bn. 2017/2018 Toyota 1.0 bn Volkswagen (plant expansión) 1.1 bn Source: CAMEXA, monthly reports,
9 Most recent investments in Mexico Automotive Supplier Supplier Total investment in US-Dollar (million) Announcement Hirschvogel 30 m 01/2017 Bosch 80 m 12/2017 Leoni 22 m 10/2017 Salzgitter Mannesmann Precision 37 m 12/2017 Siemens 77 m 2017 Saargummi 34 m 2017 Source: CAMEXA, monthly reports,
10 Impact of NAFTA negotiations on German companies German industrie would welcome a focus on updating the NAFTA instrument due to its age 68% of CAMEXA companies plan to invest in Mexico during 2018 in spite of the insecurity generated by NAFTA negotiations In case of failure of negotions, - 69% of CAMEXA companies expect a negative impact on their business - WTO rules will put Mexico in advantage towards the US in terms of tariffs - It will send a bad signal for Mexico s business model - It will strengthen the economic cooperation between Germany and Mexiko as Germany today is the most important European Partner 10
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13 Services by CAMEXA for the automotive sector Dual vocational training The German system in Mexico Participants: Magna, Bosch, Schuler, VW, Audi Careers: Mechatronics, Tool Maker, Industrial Mechanic, Car Body Constructor, Autotronics and Electrician for Automatization The Mexican Dual Vocational Education Modell Systematic approach: Shared responsibility between Mexican Private Sector (CCE) and the Ministry of Education (SEP). 12 careers related to the automotive sector Train the trainer and certification by CAMEXA 13
14 Services by CAMEXA for the automotive sector Solutions for environmental business policies: Instruments to implement Energy Efficiency Management Systems The European Energy Manager (Continental) Learning Networks (Bosch, CLAUT) Instruments to implement ISO Training course for strategic environmental management developed with Volkswagen and GIZ Training course for operative environmental management developed with Volkswagen and GIZ 14
15 Key Challenges for German companies in Mexico Mentality of mañana Interpersonal and intercultural skills: Courtesy and respect Creating good personal relationships to be patient German long-term planning <-> Mexican Flexibility 15
16 Study: Lessons Learned in Mexico Interviews with German suppliers in Mexico 04/2017 Quotation: (...) The Germans have their mentality and the Mexicans have their mentality. So the big challenge would be to really destroy stereotypes because not every single German is super square-minded, disciplined or cold-hearted. And not every Mexican is funny and party-like and laughing. So these stereotypes are sometimes hard to break. So really taking advantage of these cultural differences is a big challenge and is actually something that if done in a proper way can be potentially very, very strong. ( ) 16
17 Andreas Müller
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