Introduction to the Mexican market

Low cost

Demands in the private sector are driven by low manufacturing costs, low logistics costs, strong macro-economic indicators and a surge in consumption demand by the growing middle class.

Mexican Industry is primary cantered around Mexico City and the US/Mexican border, and is a highly competitive production nation, and domestic consumption has spurred during the 21 century. Consumer credits are growing at 25 % per year and credit card billing is growing at 40% per year. It has become easier to buy on credit and several markets are growing across the country. The consumer company activity is spread out to several 2nd and 3rd tier cities  and are focusing their marketing and sales expansion plans to cities like Guadalajara, Monterrey, Queretaro, and not only to Mexico City.

39 million people have high or very high income

Demand growth has increased foreign products’ supply and there is a strong demand for luxury products: The top 10 % of households hold around 40 % of incomes and 80 %of assets,   and the rich segment is constantly looking for new products to purchase.

Facts about the mexican market:

• Location

–As a “Near Shore” option for the North American market (NAM), Mexico serves as manufacturing, engineering and sourcing base for NAM

• Local Market Size

–The large local market size and growth potential offer a solid base for loading of manufacturing and engineering capacity in addition to export potential

• Manufacturing Cost

–Mexico is attractive for mid to mid-high labour content, as well as products that are heavy or over sized with higher freight cost

• Dollar Dependency

–Strong correlation between the peso and USD makes Mexico a natural choice for companies with high invoicing in USD

• Logistical Savings

–Free trade transit zones, local consolidation points (inbound and outbound) and localized customs clearance lead to optimized time, transportation costs and administration efficiency.

Source: Swedish Trade Council