Mayra González Velasco : Inteview

Interview : Mayra González Velasco

What makes Mexico a popular investment destination for the global automotive industry, and how can this position be consolidated?

MAYRA GONZÁLEZ: Above all, Mexico has a fantastic geographic location, connecting North and South America, with port access to both the Atlantic and Pacific oceans. This makes it easy to export to both Europe and Asia. Internally, the country has good infrastructure and connectivity between its major cities, easing the transport of products in the supply chain and facilitating export practices. To further consolidate investment, we simply have to build on these positive attributes.

Regarding infrastructure, if the industry keeps growing at its current pace, we will need a joint strategy between automakers and the government to ensure adequate capacity is provided to facilitate the industry’s long-term growth. The presence of almost all major original equipment manufacturers (OEMs) in Mexico has not only boosted the industry’s stature on a global level, but also boosted development along the value chain. In terms of this development, many private and public initiatives exist to boost vertical supply chain integration. One of these programmes is ProMéxico’s Alianza con Compañías Trasnacionales (“Transnational Partnership”) model which connects OEMs with local companies in the supply chain, thereby allowing them to increase the amount of Mexican content in their vehicles while enhancing collaboration between international and domestic companies. To complement this, the state governments in the Bajío industrial region are very open to investment. Nonetheless, in order to keep the whole industry competitive we need the federal government to generate further incentives for stakeholders to keep developing this supply chain.

What steps need to be taken to support the growth of the electric vehicle segment?

GONZÁLEZ: Sustainable mobility is the way forward for the automotive industry. The challenge is for Mexico to establish itself as a leader in the electric vehicle market, in the same manner as it has in the broader automotive industry in recent years. The country already has an important domestic market for hybrid vehicles and therefore has enormous potential for electric vehicle sales as well. For this to be a success it is essential that distributors, automakers and the government ensure that the necessary infrastructure is in place to support the growth of this segment.

This will depend on the building of alliances between different industry players, such as the one formed between Nissan and BMW that has created around 500 charging points in the country. Nevertheless, the government also needs to design a more sophisticated policy framework, one that includes financial incentives for automakers and consumers, while facilitating better collaboration between the public and private sectors. This will ensure that Mexico is ready for the coming electric vehicle revolution.

How can the country become a research and development (R&D) centre for the sector?

GONZÁLEZ: A number of industry players now have their R&D centres in Mexico. The needs of OEMs and increased innovation have attracted leading global providers and turned states such as Aguascalientes into important centres for sector R&D, and prioritised innovation in the creation of supply chains. Nevertheless, it is clear that this focus on R&D cannot be maintained without the further development of the country’s human capital. This is the responsibility of both public and private actors.

Automakers have to make an effort to develop their pool of human resources. One of the most widespread ways of doing this is through the establishment of education centres that provide local students with specialised training in the automotive field. In addition to being important for the development of the industry, it also provides opportunities for the local community.