Automotive Industry in Mexico

Huxley Manufacturing Company, a large firm in the defense industry, is considering a strategic move to shift production from its California plant to Mexico. Tariff reductions made possible by the North American Free Trade Agreement (NAFTA) opened up the potential to enjoy significant cost savings by shifting production south of the Mexican border.

From the last two decades auto industry is growing more competitive. Competition from the foreign automakers like Toyota and Honda is also high. In

Mexican firms are now able to produce products at highly competitive prices thanks to lower-cost labor and proximity to the American market

Mexico and Venezuela are very similar. They both depend on oil and have a warm climate. Mexico is the uppermost country in Latin America. They have a lot of coastline and have a warm semi tropic climate.

Mexico is known for its beautiful and traditional culture, delicious food, and tourist locations. Its agricultural industry also plays a very important role for this country. It is among the world’s leading agrifoods producer, ranked number 10 in world merchandise trade and considered Latin America’s second largest economy after Brazil (Mexico/Economy/Agriculture, n.d.).

Technological issues would be minimal. Mexico is well off when it comes to internet technology. Almost every home in major cities now have Wi-Fi connection. My business would also be able to provide this service. They also have cell-phone service readily available in these major cities. I would have minimal political-legal issues. That is because of the North

In manufacturing sector government promotes operations for labour intensive industries and exports for example tourism and in bound manufacturing units taking advantage of readily available low cost labour and vicinity to US market. Due to its population growth Mexico is the home for cheap and highly skilled young labour force. As per Huff Post Tech (P.1 “For a country that graduates more than 118,000 engineers each year and with more than 80 institutions specializing in engineering, entrepreneurship represents hope and the prospects of upward mobility for many

Mexico’s economy is mixed. The government, its agencies and government-owned or –controlled companies are anticipated to lessen their typically dominant position in the areas of public utilities, telecommunication, and petroleum. Private enterprise is the primary factor with regard to mining, manufacturing, entertainment, commerce, and the service industries. This also includes construction and tourism as well. Foreign investment is mostly found in the industries of mining, manufacturing, and the financial sectors.

Geographically diversify into Central and South America market. Relocate manufacturing to Mexico while remain R&D and product development in America to reduce cost. Funding in R&D for new products that fit with the trend of technology. Advertising and promotion in the title of American made brand.

AutoZone’s primary industry is best categorized as the auto parts retailer industry since they sell an assortment of brand name and private label auto parts to consumers and commercial customers (Parnell, 2008). As a result, AutoZone’s primary industry would include companies such as, O’Reilly’s Auto Parts, Advance Auto Parts, Napa Auto Parts, and a litany of small family owned businesses that specialize in selling auto parts. AutoZone’s secondary industry includes a plethora of companies, such as, new car dealerships, giant discount stores like Walmart and Target, convenience stores, and Amazon, since they sell a multitude of products also sold by AutoZone and other stores in their primary industry. Therefore, the auto parts retailer industry

Based on the labor plus it 's a six (www.wilsoncenter.org) there are 6 million US jobs that depend on trade with Mexico. To border states that trade extensively with Mexico, California (692,000) and Texas (460,000) Jobs, have the mouse. Although these bordering states depend mostly on trade with Mexico, they aren 't the only one. Nebraska, New Hampshire, and South Dakota also send more than 20% of their exports to Mexico. Based on empirical evidence and that Hector a hole and model,The US is abundant and import goods and services and Mexico is abundant and export, while giving the US a comparative advantage over Mexico terms of trade. 8–0 basic Sarah is defined as an egg canonically that will export good and it 's abundant factors and import good intensive this car factor of production.

2. The information listed below is accurate as of 2014. The Mexican economy has a labor force of 52.9 million people. This labor force comprises of 13.4% agriculture, 24.1% industry, and 61.9% services. The services also exceeded $550 billion, which is just under half the $1.3 trillion Mexican economy. During this time period the unemployment rate was reported at 4.8%. The unemployment rate could, however be up to a 25%. Over half of the Mexican population is below the poverty line at 52.3%. Mexico exported $406.4 billion. The major Mexican exports include: manufactured goods, silver, oil and oil products, fruits, vegetables, cotton, and coffee. The United States (U.S.) is Mexico’s largest export partner, contributing to 78.8% of the total exports. Mexico imported $407.1 billion. Mexican imports include: steel mill products, metalworking machines, agricultural machinery, automobile parts, aircraft, aircraft parts, and electrical equipment.1

Some companies might be deterred from outsourcing here, since the Mexican government has some strict regulations. “They require paid vacation premium, eight paid holidays each year, medical care coverage, employee training, Mexican social security, overtime, premiums, Christmas bonus of 15 days salary, and profit sharing of 10 percent of total profits” (Schniederjans). Mexico is also notorious for economic volatility and instability. Their dependence on the U.S. economy is unhealthy, they often experience our negative economic fluctuations to a magnified degree. Lots of companies prefer to invest their money in countries that offer a little more stable.

Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This