AUTOMOTIVE
Thanks to its huge automobile industry filled with experts and trained workers and free trade agreements, Mexico is the target of investment for many global automakers, making the industry the beating heart of the country's economy.
Mexico is an interesting market for us because we carry out worldwide delivery of the Q5 from here. Thanks to NAFTA, 50% of our production goes straight to the US. Additionally, Mexico has trade agreements with many countries. Mexico has made a great base for us because of its experience following Volkswagen starting 50 years ago here. Mexico has huge automobile industry with many experts and trained workers. Mexico was one of our biggest targets for investments. We started with a new plant, a new product, and completely new people. We were one of the first premium suppliers to build a plant in Mexico, making it the first premium car plant in Mexico. In 2018, we had our first year of full production. Our annual capacity is around 150,000 cars, and we reached 500,000 Q5s in Mexico in January 2020. It was an excellent success story of producing 500,000 units of a premium product in three years and two months.
Demand is changing significantly. In 2018, the industry grew by 9% while Lincoln grew 21%. To date, the industry has shrunk 11% YoY from 2018 to 2019; however, we are optimistic the industry will recover. The luxury automotive market is behaving inexplicably, with sales increasing in 2018, partly due to credit access in the market currently. We are launching new products, and we expect to expand our sales base. We recently opened a new plant in China, and we have our MKZ sedan production in Hermosillo. We have plans to grow, and we hope the market will grow with us. Our plant in Hermosillo has been open for more than 20 years and has been building Lincolns for more than 10 years now. It is the only plant in Mexico that builds Lincoln vehicles; we even build the Lincoln hybrid vehicle here. The cars produced here are shipped to markets all over the world.
Mexico was the only big market that Kia was not present in, with brand awareness at 0.4%. This was shocking, considering our global presence and high volume in the US. We launched the brand with a strategy based on four pillars. One pillar was a strong marketing campaign introducing Kia, our arrival, and our product lineup. We then developed a strong dealer network that covered 99% of the country in less than three years. We then upscaled the brand image with three products: large SUVs (Sorento and Sportage), and Forte, which would later be produced in Mexico. Finally, to differentiate ourselves, we launched the largest warranty in Mexico for 150,000km. Our manufacturing plants also helped significantly; Mexico has one of the biggest Kia manufacturing plants globally. It was a USD3-billion investment that gave us a product made in Mexico adapted to Mexican needs. The Rio, Forte, and Sportage models represent almost 80% of our total sales and have made us the fifth brand in terms of volume.
We are largely reliant on the automotive market, but part of our success comes from our ongoing diversification. We are looking into the metals and mining sector, which are both growing in Mexico. Our goal is to become a supplier of technology. We want to move from products to solutions. We keep focusing on promoting our e-factory concept, which is our vision for Industry 4.0. The biggest advantage of the e-factory is that it is reliable and does not require a completely new investment in infrastructure or a new production facility. Mexico needs to be more efficient, and for us that is a massive opportunity. Our goal is not to replace people with machines but to have more specialized and technical workers and engineers. We need to keep increasing our efforts to increase the knowledge and ability of workers and technology in the industry. The goal for us is to keep growing on the back of our five-year growth trend.
Volvo has been in Mexico since 2009. Everything changed dramatically when we released our new sales platform starting with the XC90. Today, the XC90 represents our oldest platform, even though it is fairly new. We transformed our entire portfolio of products, moving from offering only a safe car to a safe car with greater technological design. Now, we cover practically everything our customers want, which has helped us to transform the company while retaining our core value, which is people. People are the most important part of our brand; everything we do is designed to keep people safe. Along with safety, we provide comfort, technology, power, and the ability to move in a sustainable way. Mexico City is one of the largest urban areas in the world, with heavy traffic and pollution. With its product, Volvo is looking to improve the quality of life of our customers in Mexico. Volvo is one of the brands still growing in what is a difficult industry environment.
AUTOMOTIVE
TABLE OF CONTENTS
Focus
Inclusive development
Home to more than 22 million people, Mexico City is one of the most important cultural, financial, and educational centers in the world. While the lack of a coordinated approach to urban development has hurt the city's potential in the past, the current government is fully determined to promote inclusive growth and capture all the gains associated with urbanization.
read articleInterview
Alexis Langagne, North Latam Managing Director, Prosegur Security
With a cybersecurity firm, a guarding services firm, an electronic security systems company, and a video security company under its umbrella, Prosegur Security is the only company to offer a 360-degree security solution in Mexico.
read articleInterview
Rafael Fernando Marín Mollinedo , General Director, Public Decentralized Office of the Interoceanic Multimodal Corridor of the Isthmus of Tehuantepec
With the development plan of Isthmus of Tehuantepec in hand, Mexico will bring about greater economic development in the country's often-overlooked south.
read articleForum
Engineering
Each one of the three companies featured in this forum are known for disrupting the construction industry in their own unique ways. While Grupo Beck is a pioneer of the integrated delivery process in Mexico, Bovis is among the first companies to build high-rise buildings in the country. Sacyr Concesiones, on the other hand, uses infrastructure development as a means to promote equality.
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Fabrizio Feliciani, Regional Director, UNOPS
As the UN's special projects services unit, UNOPS' main goal is to support public institutions that are undertaking important infrastructure projects to contribute significantly to advancing a country or region's development agenda.
read articleInterview
Alejandro R. Paolini, Managing Director of Mexico, Central America & Caribbean, Siemens Healthineer
Siemens Healthineers' aim is to support the growth and development of Mexico's healthcare sector and help the government with innovative technologies, especially those that help treat chronic diseases.
read articleInterview
Yon de Luisa Plazas, President, Mexican Football Federation (FEMEXFUT)
Mexico's Liga MX is among the world's top-10 football leagues, and FEMEXFUT plans to push it into the top three by improving four key pillars, namely sporting success, sports justice, international relations, and social responsibility.
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