Electronics and IT Hardware Sector In Mexico
Mexico is currently the 2nd largest supplier of electronics to the US, after China. Mexico also became the world’s largest producer of smartphones and the 2nd largest exporter of televisions. In 2011, the sector exported US$75.4 billion.
This burgeoning industry has become the main economic activity in some cities such as Tijuana, Guadalajara and Ciudad Juarez. Under the maquila scheme these cities have propelled Mexico as the primary producer of electronic products demanded in the audio, video, computing, and commercial equipment markets. This has been achieved by having a manufacturing focus that has been shifted from high-volume low-mix, to low-volume high-mix products. There are over 730 manufacturing plants related to the electronic industry. 8 out of the 10 world’s largest manufacturing service suppliers operate in Mexico. The skilled workforce, strategic location, large suppliers and supply chains and logistics are the main reasons for locating in the country. Mexico is the country with the lowest industry component manufacturing costs, being 18.2% above other countries such as U.S., Canada, the Netherlands, France, Germany and Japan.
Between 2000 and 2010, Foreign Direct Investment (FDI) in the electronic sector registered a total of US$20.55 billion, concentrating on the production of informatics process equipments and spare parts for communication devices. In 2011, the Foreign Direct Investment totaled US$616.7 million.
Because of this and due to Mexico’s young growing talent, each year more than 114,000 students of engineering and technology related fields graduate from Mexican universities. Electric and electronic industries have had an important development in the country.
More than 90% of enterprises in Mexico are SME´s and 65 to 70% of them haven’t started implementing process automation due to a lack of technological and business cultures. Although there is a wide availability to finance IT equipment, most IT suppliers haven’t paid attention to this niche market.
Beside this niche market, expenditure in IT by big companies (which invest approximately 60% of their expenses) and medium large companies (with IT average expenses between US$50,000 and US$250,000 according to IDC Latin Consultancy), help create a market whose demand seems to be in expansion as technology becomes part of everyday.
The Mexican government launched an initiative in 2010 with the objective to turn Mexico into a manufacturing world center of electronic goods. By increasing electronic exports to up to US$80 billion by 2011, and investing between US$5 and 10 billion in the industry, the Mexican government would cause expectations that they are willing to invest in tackling the limitations of this sector.
By following the strategic activities of the program, Mexico will offer the following business opportunities to British Companies:
IT equipment for SMEs.
Training in English language for the electronics industry.
Investment in R & D.
Integration on wireless connectivity solutions regarding mobility, VoIP and servers.
Electronic consumption products such as MP3 players, mobile phones, PDAs, etc.
Wholesalers are promoting the migration to a specialised model of distribution focused on solutions like consultancy, outsourcing, technical support, etc. There is expected growth for storage consumables.
For equipment, the sectors with the biggest growth would be: multifunction equipment, digital cameras, handhelds, and telecomm equipment (voice and data).
Recycling of electronic components
Getting into the market
Mexico is the best Latin American country to do business, and number 35 worldwide (WB, 2010). It takes only 9 days and 6 procedures for opening a business in the country. This indicator has positioned Mexico with a higher performance before all the BRICs and all Latin American Countries (WB, 2010).
Mexico is a safe country for foreign investment. It has 28 BITs (Agreements for the Promotion and Reciprocal Protection of Investments) and agreements to avoid double taxation with 40 countries.
The IT industry can rely on chambers and associations to support and promote the development of this sector in a global, socially responsible and competitive environment.
The main chambers and associations are:
Mexican Association of the Industry of Technology and Information (AMITI)
National Chamber of the Electronics Telecommunications and Informatics Industries (CANIETI)
National Association of Distributors of Information Technology and Communications (ANADIC)
Mexican Institute of Teleservices (IMT).
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
Luis Calette, Trade & Investment Officer. Tel: +52 (664) 615 8046 or email: [email protected]
Ana Gallardo, Trade & Investment Officer. Tel: +52 (664) 615 8046 or email: [email protected]
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
May – June, 2013
Feria Internacional de Computacion y Electronica 2013
7-11 August, 2013
ITT Expo 2013
10-12 September, 2013