Asian Automotive Manufacturers Gaining Traction in Mexico
Commentary by Doug Donahue
Automotive World reported recently that the Japanese automotive supplier Mitsubishi Electric has established a subsidiary in Mexico. A Japanese supplier setting up operations in Mexico is not unique. What is unique, though, is that, according to the article “The new manufacturing and sales company in Mexico will enable Mitsubishi Electric to establish a local supply system for automotive equipment, strengthen price competitiveness and realize an efficient business structure for the expansion of business throughout the Americas.”
This reinforces the important point that manufacturing in Mexico isn’t just about accessing low-cost labor for quick export into the US. By setting up operations in the country, companies are also able to tap into growing markets in both North and South America, with Mexico as the platform for entry.
In this case, Mitsubishi is using Queretaro as a supply chain base to serve the Americas, at the same time leveraging free trade agreements set up by the Mexican government to minimize tariffs and operating costs.
Source: Automotive World