Mexico: getting some Audi love

Financial Times, 5/6/2013

The auto industry’s love affair with Mexico seems to know no bounds these days. Just days after Japan’s Honda announced the creation of a $470m transmission plant in the country, it was the turn of Audi to laid the foundation stone for a $1.3bn assembly plant in Mexico over the weekend. Aimed at challenging BMW’s global leadership of the international luxury SUV market, the new factory is expected to come on stream in 2016, building 150,000 Q5 SUVs a year. In addition, Rupert Stadler, Audi’s chief executive, said the company is mulling a Q6 version that would double the plant’s capacity.

The plant is being build at San José Chiapa between the city of Puebla and the port of Veracruz, handily located for shipment of vehicles to the US eastern seaboard and Europe. While many of the new investment in Mexico’s export-led auto industry has been heading to the nation’s Colonial heartland and further north, Puebla is a home-from-home for German carmaker Volkswagen, the parent company of Audi.

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Long and unpredictable border wait times add additional costs to regional manufacturers – #MexFacts

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Op-ed: Why you should be excited about Mexico

By James McKeigue, MoneyWeek, 2/5/2013

I’m not going to downplay the social impact and human suffering that the drug war is causing. And I’m not ignoring the unfairness and inequality created by the pernicious spread of corruption. But the fact is, Mexico’s economy is powering on regardless of these evils. And while high-profile accidents and drug battles are scaring away retail investors, a lot of the ‘smart money’ is already in the country. For example, during the first three quarters of 2012, institutional investors poured $57bn into Mexican stocks and bonds. That’s five times more than went to Brazil. Why is that happening?

Firstly I’m not surprised. I’ve spent a lot of time in Mexico, including a stint reporting there for a US mining publication, and I’ve always been impressed how far removed life in Mexico City is from the drug problems. Indeed, if it wasn’t for the local press’s penchant for gory pictures of bloodstained drug lords lying sprawled on roadsides, I would have forgotten all about it. But it’s been a few years since I was last there, so I got in touch with one of my contacts, Eduardo González, a lawyer with Mexican firm Creel.

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Op-ed: Mexico: The New China

The New York Times, 1/26/2013

In November I quit my job as the editor of Wired to run 3D Robotics, the San Diego-based drone company I started with a partner as a side project three years ago. We make autopilot technology and small aircraft — both planes and multirotor copters — that can fly by themselves. The drones, which sell for a few hundred bucks, are for civilians: they don’t shoot anything but photographs and videos. And they’re incredibly fun to build (which we do with the ample help of robots). It wasn’t a hard decision to give up publishing for this.

But my company, like many manufacturers, is faced with a familiar challenge: its main competitors are Chinese companies that have the dual advantages of cheap labor and top-notch engineering. So, naturally, when we were raising a round of investment financing last year, venture capitalists demanded a plausible explanation for how our little start-up could beat its Chinese rivals. The answer was as much a surprise to the investors as it had been to me a few years earlier: Mexico. In particular, Tijuana.

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VW CEO: Mexico key in quest to become world’s top carmaker

CNN, 1/17/2013

At the lavish opening of Volkswagen’s latest plant in Mexico, the company’s boss and Mexico’s new president join hands to push a button. A vast sheet drops to reveal a gleaming assembly line for engines — surrounded by newly hired VW employees waving Mexican flags. It’s an obviously symbolic moment: Mexico relies heavily on multinational car firms to power an important sector of its economy. The country is currently the fourth largest auto exporter in the world.

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L’Oreal bets on growing Mexico beauty market

Smartplanet, 1/16/2013

When it comes to beauty, Mexican women want their cherry-red locks or bleach-blond highlights to be noticed, and their makeup to shout. Mexican men don’t hold back when running gel through their hair. The liberal use of beauty products here is why L’Oreal, the Paris-based maker of colorants, makeup and hair products has just opened its largest colorant plant in the world here.

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Mexico: China’s unlikely challenger

Financial Times, 9/19/2012

The shift in production at Siemens is part of a little publicised manufacturing revolution in Mexico taking place across a range of industries from cars and aircraft to refrigerators and computers. For the first time in a decade, Latin America’s second-largest economy has become a credible competitor to China.

During the first half of this year, Mexico accounted for 14.2 per cent of manufactured imports into the US, the world’s largest importer. In 2005, Mexico’s share was just 11 per cent. Surprisingly, China, which gained huge chunks of the US import market for many years, has started to lose ground. From a high of 29.3 per cent of the total at the end of 2009, it has now shrunk to 26.4 per cent.

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Audi revs up in Mexico

Financial Times, 9/4/12

San José Chiapa. This small Mexican town in the southern state of Puebla is  to be the location of Audi’s first production facility in Latin America’s  second-biggest economy…

A company press release on Tuesday said that Audi looked at  a dozen locations but ended up going with the Puebla site because of its good  logistics, infrastructure, quality living and skilled labour. Rupert Stadler,  Chairman of the Board of Management of Audi AG, said, “The chosen location is an  ideal base from which to supply international markets from Mexico”.

All of this speaks volumes about Mexico’s emergence as a global car manufacturer. Over the past five years or so,  practically all of the biggest names in vehicles have poured billions of dollars  into Mexico for its potential as a global centre for manufacturing and exporting  cars.

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Mexico’s Resilient Industrial Machine

Forward Online, 3/5/12

Seven years ago, EE Technologies (EET) opened a new plant in Empalme, Mexico, on the balmy eastern shore of the Gulf of California. For the Reno-based manufacturer of electronic circuit boards, setting up shop 300 miles south of Tucson, Arizona, seemed like the best way to stop the hemorrhaging of its customers to competitors with low-cost overseas operations.

“It’s like recapturing your own business,” says Rogan Owens, the company’s engineering manager who ran the Mexico operation between 2009 and 2011. Not only was the company ditching what had been a costly domestic manufacturing operation, but company officials also liked the idea of keeping a reliable supply chain while staying close to their American customers, avoiding the hassles that some competing electronic manufacturers with plants in China were experiencing.

Why is all of this important to the rest of the continent? Jobs, says Christopher Wilson, an economist at the Mexico Institute of the Woodrow Wilson International Center for Scholars in Washington, D.C. Six million American workers, one in every 24, depend on trade with Mexico to stay employed.

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Mexico December factory survey points to growth

Reuters, 1/4/09

A Mexican manufacturing sector survey pointed to future growth for a sixth straight month in December but the reading suggested the economic recovery could be losing some steam.

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