The Usa and Mexico
Content
Introduction………………………………………………………………………………..….3
1. Cultural differences in a business environment between the USA and Mexico ….……4
2. The USA – Mexico relations overview ……………………………………………..…….5
3. The USA – Mexico relations in the automotive industry, trade and FDI………………6
4. Government support program for Mexican auto part producers…..…………………11
5. NAFTA ……………….…………………………………………………………………...11
6. Entry mode strategy………………………………………………………………………12
7. Political risks for investors……………………………………………………………….13
Conclusion……………………………………………………………………………………14
References……………………………………………………………………………………15
Introduction Automotive industry in Mexico is one of the fastest growing sectors in its economy. Around 2.1 million produced cars are exported to markets in South and North America, Japan and Europe. Around 64% of the Mexican-made vehicles are exported to the USA market. Since 2008, Mexico has arisen as one of the most competitive ground for foreign manufactures of producing vehicles. American leading automobile producers are rapidly expanding in Mexico as it is the most attractive market due to its proximity to the USA and signed North American Free Trade Agreement (NAFTA) between countries. In turn, Mexico offers such competitive advantages as skilled cheap labor force (nowadays even cheaper and more qualified than in China), product quality, geographical position, top local and multinational suppliers and easy access to other markets due to free trade agreements. This report will clarify the trade relation between the USA and Mexico, and make the business collaboration more understandable in order to help American automobile producer company enter a new market with good elaborated strategy. Furthermore, in this report it will be described current situation in the automobile market, the level of government protectionism policy against FDI and import, the influence of NAFTA and possible
Introduction………………………………………………………………………………..….3
1. Cultural differences in a business environment between the USA and Mexico ….……4
2. The USA – Mexico relations overview ……………………………………………..…….5
3. The USA – Mexico relations in the automotive industry, trade and FDI………………6
4. Government support program for Mexican auto part producers…..…………………11
5. NAFTA ……………….…………………………………………………………………...11
6. Entry mode strategy………………………………………………………………………12
7. Political risks for investors……………………………………………………………….13
Conclusion……………………………………………………………………………………14
References……………………………………………………………………………………15
Introduction Automotive industry in Mexico is one of the fastest growing sectors in its economy. Around 2.1 million produced cars are exported to markets in South and North America, Japan and Europe. Around 64% of the Mexican-made vehicles are exported to the USA market. Since 2008, Mexico has arisen as one of the most competitive ground for foreign manufactures of producing vehicles. American leading automobile producers are rapidly expanding in Mexico as it is the most attractive market due to its proximity to the USA and signed North American Free Trade Agreement (NAFTA) between countries. In turn, Mexico offers such competitive advantages as skilled cheap labor force (nowadays even cheaper and more qualified than in China), product quality, geographical position, top local and multinational suppliers and easy access to other markets due to free trade agreements. This report will clarify the trade relation between the USA and Mexico, and make the business collaboration more understandable in order to help American automobile producer company enter a new market with good elaborated strategy. Furthermore, in this report it will be described current situation in the automobile market, the level of government protectionism policy against FDI and import, the influence of NAFTA and possible
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