ASiAn invASion wElcomEd - ProMéxico

22 Negocios Photo courtesy of nissan mexicana
Asian
invasion
Welcomed
Over the last ten years, Mexico has become an important destination for
Asian investments. Asian companies have found in the country a profitable
and advantageous spot for their global expansion plans.
By Graeme Stewart
If ever two business cultures were made for each
other, it would seem to be those of Mexico and
Asia. Over the past decade, Asian companies
have invested in manufacturing plants in Mexico,
contributing billions of dollars to the Mexican
economy while taking advantage of the available
geographical and tax advantages, not to mention
the highly rated Mexican workforce.
Japanese car manufacturing giant Nissan is
one of those companies established in Mexico
that has found profitability from all the advantages
of outsourcing away from its native shores.
Diego Arrazola, head of communications
at Nissan Mexico, explains why Mexico is a
favorite destination: “México is a country with
important advantages in terms of the quality of
the product and competitiveness in costs, infrastructure
and geographic location. It shares its
border with the United States and has important
ports on the Atlantic and Pacific Oceans.
This enormously facilitates the requirements
of time and embarkation costs not only with
the rest of North America but also with Latin
America and Europe.”
The free trade agreements Mexico has established
with different countries (United States,
Canada, Japan and others) have yielded such
benefits as making products more competitive
abroad because of lower manufacturing costs
compared to other countries. This helps Mexico
to be considered as an excellent export base, allowing
companies to sell vehicles abroad that
were made in another country and not at home.
Such free trade agreements create benefits and
tax incentives in technology, employment creation
and training. Furthermore, the treaties
give preferential tax levels among the participating
countries –in this case, Mexico. This allows
cheaper costs in production, commercialization,
investment opportunities and other benefits.
The parity of the peso to the dollar, which
can introduce an inflation factor into the Mexican
economy, is still attractive abroad as it reduces
production costs for foreign companies
with plants in our country. This cost reduction
is good news for Mexico as it allows these countries
to considerably raise production quotas.
This way, more products can be sold abroad at
competitive costs with bigger profit margins.
On the quality of the Mexican labor pool,
Arrazola said: “The Mexican workforce is acknowledged
to be world class. The products
made in Mexico have an exceptional quality
and surpass the standard levels of other countries.
These qualities make Mexico a reliable,
cheap and profitable production center.”
Nissan Mexico’s plants have competed for
and won new investments and projects due to
their valued and profitable workforce, he said.
Sentra and Tiida cars are an example of that.
Their production is not only for the national
market but also for the export market; the United
States and Canada in the case of Sentra and
Versa; as well as Europe and other countries in
the case of Tiida.
“The Renault–Nissan alliance, created in
1999, offers further examples of the advantages
Mexico has as a manufacturing center,” Arrazola
said. “The antecedent of what we have
accomplished until today is to be found in 2000,
the date when production of the Renault Scenic
in Nissan’s Cuernavaca plant began (the production
of this model stopped in 2004).”
In 2001, production began of the Renault
Clio at the Nissan plant in Aguascalientes and
it continues today. Finally, in 2003 and also at