The Usa and Mexico

Topics: Automotive industry, North American Free Trade Agreement, Mexico, United States / Pages: 16 (3808 words) / Published: Apr 10th, 2013
Content

Introduction………………………………………………………………………………..….3

1. Cultural differences in a business environment between the USA and Mexico ….……4

2. The USA – Mexico relations overview ……………………………………………..…….5

3. The USA – Mexico relations in the automotive industry, trade and FDI………………6

4. Government support program for Mexican auto part producers…..…………………11
5. NAFTA ……………….…………………………………………………………………...11

6. Entry mode strategy………………………………………………………………………12

7. Political risks for investors……………………………………………………………….13

Conclusion……………………………………………………………………………………14

References……………………………………………………………………………………15

Introduction Automotive industry in Mexico is one of the fastest growing sectors in its economy. Around 2.1 million produced cars are exported to markets in South and North America, Japan and Europe. Around 64% of the Mexican-made vehicles are exported to the USA market. Since 2008, Mexico has arisen as one of the most competitive ground for foreign manufactures of producing vehicles. American leading automobile producers are rapidly expanding in Mexico as it is the most attractive market due to its proximity to the USA and signed North American Free Trade Agreement (NAFTA) between countries. In turn, Mexico offers such competitive advantages as skilled cheap labor force (nowadays even cheaper and more qualified than in China), product quality, geographical position, top local and multinational suppliers and easy access to other markets due to free trade agreements. This report will clarify the trade relation between the USA and Mexico, and make the business collaboration more understandable in order to help American automobile producer company enter a new market with good elaborated strategy. Furthermore, in this report it will be described current situation in the automobile market, the level of government protectionism policy against FDI and import, the influence of NAFTA and possible



References: Black, T. 2010.GM, Ford Accelerate Shift to Mexico Workers Making $26 a Day. The Bloomberg, [online] (Last updated 10:26 pm on 9th Jun 2010) Available at: [Accessed on 29 December 2012]. Casey, N. 2012. In Mexico, Auto Plants Hit the Gas. The Wall Street Journal, [online] (Last updated 10:12 pm 19th November 2012) Available at: [Accessed on 29 December 2012] PwC, 2012 KPMG, 2012. Assessing an Investment in the Mexican Automotive Industry.Available at: [Accessed on 29 December 2012] Fingar, C Rathbone, J. 2012. Free trade: Way ahead “is openness, not protectionism”, Financial Times, [online] (Last updated 12:35 am18th June 2012) Available at: [Accessed on 5 January 2013]. Thomson, A. 2012. Mexico goes for the gold in auto production, Financial Times, [online] (Last updated 11:39 pm 6 August 2012) Available at: [Accessed on 5 January 2013]. Taylor, G. 2012. NAFTA key to economic, social growth in Mexico, The Washington Times, [online] (Last updated 14 May 2012) Available at: [Accessed on 5 January 2013]. Roubini, N. 2010. Promoting Foreign Direct Investment, Economy Watch, [online] (Last updated 30 June 2010) Available at: [Accessed on 5 January 2013]. Gesteland, R.R. (1999). Cross-culture business behavior. Herndon, VA: Copenhagen Business School Press. Kenna, P. and Lacy, S. (1994). Business Mexico: A practical guide to understanding Mexican business culture. Lincolnwood, IL: NTC Publishing Group. (Kenna and Lacy, 1994c). Martin, J.S. and Chaney, L.H. (2006). Global business etiquette. Westport, CT: Praeger Publishers. Black J (2010) “Americans choose Mexico”, The US Management Journal, Vol. 2, No. 9, Spring, pp. 212-234. Flannery, N., 2012. Does Mexico 's New Government Pose a Risk for Investors?, Forbes, [online] (Last updated 18 September 2012) Available at: [Accessed on 7 January 2013].

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