Mexico’s auto industry has grown steadily since the enactment of NAFTA over 20 years ago; today, the country accounts for about 18% of North American auto production, and is on track to overtake Japan and Canada as the United States’ no. 1 source of imported cars by the end of 2015. Big-name car manufacturers are taking notice of the rising auto industry: In February Honda opened its second plant in Mexico, and Mazda’s Salamanca, Mexico, plant began production in March. Additionally, exports from American giant General Motors, which pledged last year to invest almost $700 million in their Mexico facilities, more than doubled in May, according to Bloomberg.
Mexico’s position as a rising power in the auto industry presents several benefits for American manufacturers and dealers. Mexico’s manufacturing wages are significantly lower than other leading manufacturing companies such as China, while workmanship and productivity remains high. Additionally, the country’s strategic location means that manufacturers are able to ship parts to production facilities more quickly. However, manufactures still face challenges posed by cross-border shipping. Estafeta USA provides comprehensive logistics services tailored to the auto industry to expedite this process.
Comprehensive Inbound Logistics
Estafeta USA understands that sourcing parts from across the border can result in added complications. Estafeta provides end-to-end, comprehensive supply chain solutions aimed to ensure that your inventory remains stocked and your costs remain low.
Estafeta USA is your singular point of contact for comprehensive inbound logistics. Our cross-border logistics consultants work with you to determine a customized solution to meet your needs. Several of our inbound logistics services include:
Estafeta USA knows that one of the most significant factors when it comes to staying competitive in the auto industry is the ability to get the right part to the right place at the right time. Our critical parts services ensure that this is possible by expediting the inbound transportation of mission critical parts from your suppliers to your production facilities with same-day deliveries and distribution anywhere in Mexico. Additionally, our strategically-located cross-border warehouse ensures that we can transport and retain assembly parts on a regular basis and in critical moments.
Estafeta USA can help manage your inventory and add transparency to your supply chain. Our warehousing and distribution services ensure that your parts are delivered to clients and manufacturers on-time and efficiently. Some of our aftermarket services for the auto industry include:
Estafeta USA: Comprehensive Logistics Solutions for Exporting to Mexico
The rising auto industry in Mexico presents a number of opportunities for U.S. manufacturers. The country’s strategic location, affordable manufacturing fees and free trade agreements makes it an ideal location. However, shipping cross-border presents obstacles for U.S. manufacturers, particularly regarding the delivery of critical spare or replacement parts. Estafeta USA offers several logistics solutions tailored to the auto industry which aims to add visibility to and increase the efficiency of the supply chain process. Contact a cross-border logistics consultant today to learn more about how Estafeta USA can tailor their logistics services to meet your manufacturing needs.
Below is an excerpt from the sponsored special report “Delivering the Goods,” a feature in Internet Retailer Magazine covering technologies that can improve e-retailers’ fulfillment and delivery options. Internet Retailer is an objective provider of information regarding the market trends, technology, competitive practices and people that are shaping the e-commerce industry.
Christian Bruns, CEO of Estafeta USA, a provider of freight, express shipping and parcel delivery services in Mexico.
With e-commerce sales in Mexico projected to reach $6.7 billion in 2019, up from $2.8 billion in 2014, according to Forrester Research Inc., Mexico can represent a potentially attractive sales opportunity for U.S. e-retailers. Many U.S. e-retailers, however, don’t ship south of the border because they consider the administrative, regulatory and logistical issues too big a headache to make it worthwhile.
Frequently cited speed bumps when shipping to Mexico include filling out the paperwork to clear customs, uneven delivery coverage across the country and regulations preventing packages from being left on doorsteps when consumers are not home.
“A lot of U.S. retailers don’t fully understand how to ship to Mexico, so they don’t do it,” says Christian Bruns, CEO of Estafeta USA, a provider of freight, express shipping and parcel delivery services in Mexico. “Consequently, Mexican consumers that want to buy products from U.S. retailers either can’t or have to make their own arrangements to have a purchase shipped to Mexico, which can be costly.”
E-retailers wanting to ship to Mexico can send an order placed by a Mexican consumer directly to Estafeta’s warehouse in Laredo, Texas. Once the order arrives at the Laredo facility, Estafeta clears the package through customs, prepays all duty and delivery charges then delivers the item to the customer in Mexico.
Alternatively, if an e-retailer does not want to deal with customs, duty and delivery in Mexico, it can refer a customer to Estafeta’s website where she can open a pre-ship U.S. delivery address at Estafeta’s Laredo facility. Customers that have set up a pre-ship U.S. address provide it to the retailer at checkout. In this instance, the customer is responsible for paying all duty and delivery charges. Duty is typically paid upon receipt of the package.
Estafeta will deliver anywhere in Mexico through its nationwide delivery fleet of more 1,500 vehicles.
“It’s a simplified process that removes the barriers to shipping to Mexico for retailers in the U.S.,” Bruns says.
Customers not home at the time of delivery are left a notice of the delivery attempt. If the customer does not expect to be home during the next scheduled delivery, she can arrange to have the item delivered to one of Estafeta’s 1,150 branded retail stores where she can pick it up at her convenience. Estafeta reaches 98% of the Mexican population, giving it the broadest delivery network in Mexico, Bruns says.
“While there are U.S. parcel carriers that service Mexico, what sets Estafeta apart is that we offer a variety of delivery options for e-retailers to have their products shipped to Mexico and delivered anywhere in the country,” Bruns says. “We turn delivery to Mexico into a competitive advantage.”
Mexico offers a wealth of business opportunities for companies in the United States. The country’s strategic location makes the market easily accessible, and free trade agreements (NAFTA) simplify the complexities that come with doing business in another country. Additionally, Mexico’s low cost of labor provides U.S. companies with a cost-effective way to manufacture and export goods.
Increasingly, companies within the United States are taking notice of the advantages presented by Mexico. One of the largest industry sectors currently moving into the market is the U.S. auto industry. Leading car manufacturers across the United States have been taking an interest in Mexico; last year, Honda and Mazda began production at plants in Mexico, and General Motors pledged to invest almost $700 million in their Mexico facilities. In 2014 alone, Nissan, Kia, and BMW pledged to invest $1 billion each to build auto-assembly plants in the country, and in April 2015 Toyota announced a $1 billion plant to be built in the central Mexican state of Guanajuato.
With the biggest car manufactures in the country moving their manufacturing operations south of the border, Mexico is on track to overtake Japan and Canada as the United States’ number one source of imported cars by the end of 2015. On Friday, Ford Motor Corporation joined the growing list of U.S. auto manufacturers moving in to Mexico, with the announcement of a $2.5 billion investment to build two new plants for developing fuel-efficient engines and transmissions in Chihuahua and Guanajuato, respectively.
“Ford is making a significant commitment to our business in Mexico with investment in two new facilities, while aiming to make our vehicles even more fuel-efficient with a new generation of engines and transmissions our team in Mexico will build,” Joe Hinrichs, Ford’s President of The Americas, said in a statement. “These new engines and transmissions will help deliver even better driving experiences and fuel economy gains for customers around the world.”
Ford will allocate $1.1 billion to the new engine facility, which is being built within Ford’s existing Chihuahua Engine Plant, an expansion which is projected to create 1,300 new jobs. Additionally, a $200 million investment, as well as the creation of 500 jobs, will be allocated to the expansion of Ford’s current I-4 and Diesel engines production in Chihuahua. The remaining $1.2 billion will go towards the building of a new transmission within the premises of transmission supplier and longtime partner Getrag, in the State of Guanajuato.
“Today’s announcement is an important milestone in Ford’s 90-year history in Mexico,” said Gabriel Lopez, Ford of Mexico’s president and CEO. “Currently within Ford, Mexico is the fourth vehicle producer, the fourth largest engine producer and is the second largest nation supplying Ford’s global manufacturing facilities. We look forward to delivering even more great products, including new engines and now transmissions, to serve Ford customers around the world.”
Estafeta USA offers several logistics solutions tailored to the auto industry which aims to increase the efficiency of the supply chain process. Contact a cross-border logistics consultant today to learn more about how Estafeta USA can tailor their logistics services to meet your manufacturing needs.
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AT&T, the second-largest U.S. mobile phone carrier, has completed its $2.5 billion acquisition of Mexican mobile operator Iusacell. The acquisition, which was announced in November, includes all of Iusacell’s wireless properties, including licenses, network assets, and retail stores, and will net AT&T a total of 8.6 million subscribers.
The deal, which comes on the heels of telecommunications reforms in the country, is part of AT&T’s overall plan to expand in to Latin America. Iusacell, Mexico’s third largest wireless operator in Mexico, offers wireless service under the Iusacell and Unefón brand names, a network which encompasses about 70% of Mexico’s approximately 120 million people. In November, AT&T announced its plan to expand this network further to include additional consumers and business of Mexico. Additionally, the acquisition will allow AT&T to create the first-ever North American Mobile Service area, covering over 400 million consumers and businesses between Mexico and the United States
The acquisition announcement follows a historic year for Mexico and the country’s economy: In 2014 Mexico President Peña Nieto signed in to law legislation which ended PEMEX’s monopoly on oil and set the stage for foreign investments; growth in agriculture, industry, and construction, coupled with a record-breaking auto industry propelled the economy forward in the third quarter. In January 2015 Gerardo Gutierrez Candiani, president of Mexico’s Business Coordinating Council (BCC) said that the business community expects the economy to grow 3.5 percent in 2015.
According to Randall Stephenson, AT&T chairman and CEO, the country’s economy was a direct factor in the decision to procure the mobile carrier.
“Our acquisition of Iusacell is a direct result of the reforms put in place by President Peña Nieto to encourage more competition and more investment in Mexico. Those reforms together with the country’s strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest,” he said in a statement.
The New Year marked the end of 2014, and the end of a successful year for the Mexican economy. Although the country’s growth forecast was cut several times over the year, historic energy legislation and a record-breaking auto industry prompted foreign investment and an overall positive outlook for 2015. Below is a brief summary of Mexico’s economic high points in 2014.
Oil and Gas Reforms Prompt Foreign Investment
In August, Mexico President Peña Nieto signed historic energy legislation into law. The legislation set the stage for foreign investment by ending Mexico-based oil producer PEMEX’s 75-year monopoly on oil production and allowing foreign firms to tap in to the country’s nearly 14-billion barrels of oil reserves.
Mexico Named ‘Rising Star’ in Manufacturing; Auto Industry Breaks Records
A report released in August from the Boston Consulting Group found that Mexico is one of the most cost-effective countries for conducting global manufacturing. The report, which designated Mexico a “rising star” in the realm of global manufacturing, also determined that Mexico provides cheaper manufacturing labor than China, and is estimated to have lower average manufacturing cost on a unit-cost basis than China.
Additionally, Mexico’s automotive manufacturing industry broke records in 2014; total vehicle manufacturing in 2014 reached 3 million units last year. In July 2014, Mexico was on-track to surpass Brazil as the top Latin American car producer, and was on-track to overcome Japan and Canada as the United Stat’s no. 1 source of imported cars by the end of 2015. The increased auto production opened the door for foreign investment; in February Honda opened its second plant in Mexico, and Mazda’s Salamanca, Mexico, plant began production in March. Additionally, exports from American giant General Motors more than doubled in May.
Economy Up in Third Quarter; 2015 Outlook Good
Although Mexico’s growth forecast was cut throughout the year, the economy gained momentum in the third quarter, due in a large part to growth in agriculture, industry and construction. According released in November 2014 by the National Institute of Statistics and Geography (INEGI), Mexico’s economy was growing at the fastest pace in almost 2 years at the end of the third quarter, an indication that the economy is continuing to recover. Additionally, the outlook for 2015 is positive: the Mexican business community estimates that the economy will grow 3.5 percent in 2015.
Ecommerce Sales on the Rise
According to a report released in November by BNA Americas, Mexico’s ecommerce sector is poised to become the fastest growing market for business-to-consumer sales in Latin America, reaching approximately $11 billion by the end of the year. Additionally, digital sales are expected to expand at a 17.6% compound annual growth rate by 2017.
Mexico Ranked 3rd among Latin American Economies in Ease of Doing Business
In October Mexico was named among the top five best countries for doing business in Latin America by the World Bank. The organization’s annual “Doing Business” series ranked Mexico 39th out of 189 in ease of doing business, a 4-point increase from the 2014 report. The rank also put the country in the top 5 Latin American economies, following Columbia (ranked 34) and Peru (35), and before Chile (41) and Panama (52). Additionally, Mexico was part of only one-third of countries to move up in rankings.