GSD Partners

Team Electroder, ready to rock @ Batteryshow 2024! #Batteryshow2024

Building a business with a purpose to change the world for good. There are many goals to chase, but SDGs are ready, widely recognized and practiced. #SDG #SocialImpact #doingbusinessforgood

Mexico is the largest export market for U.S. automotive parts and the fourth-largest producer of automotive parts worldwide, generating USD 107 billion in annual revenues. The size of Mexico’s passenger vehicle market and the shared border between the United States and Mexico generates a robust demand for U.S. original equipment and aftermarket auto parts. The most effective way for U.S. suppliers of auto parts and equipment to enter the Mexican market is through local representation or regional distribution. For Chinese car parts manufacturers, finding a production location is the first step, then incentives, policies and labor supply situation, before turning to pages of business calculation. Assembly plants prefer suppliers who are located close by to minimize inventory volumes and to facilitate just-in-time or just-in-sequence deliveries. It is easier to serve OEMs in Mexico if the U.S. exporter is already supplying them in the United States and has a supplier number. Automotive parts related to components for Tier 1 or Tier 2 suppliers represent the most exported items from the United States. However, opportunities exist for production motors, plastic metal hybrid components, steering casting, stamped parts, connectors, machining of high-precision parts with secondary operation, machinery and equipment, materials, pre-assembled components, cold and hot forging, aluminum die casting molds, molds, tooling, cutting tools, automation process equipment, raw materials, finished parts, and accessories. #mexico #nearshoring #USmarket #EVindustry

In recent years, Mexico has become an important node for EV makers, including Tesla, due to various factors. For starters, the country is already among the top 10 producers of automobiles globally. Its strategic position bordering the mainland US makes it an ideal candidate for nearshoring. With several trade agreements already in place, including the USMCA Free Trade Agreement that came into force in 2020, Mexico's competitive advantages make it perfectly suited for its current role. Recent 2022 statistics indicate that the country's manufacturing sector received the highest Foreign Direct Investment (FDI) at 36% of the FDI in the country. Of this 36%, 91% went to light vehicle production, with nearly 77% of the vehicles exported to the US. Besides, owing to years of investment in motor vehicles and related industries, Mexico has a well-developed supplier base, as most Tier 1 automotive manufacturers already have a presence in the country. Besides, Mexico offers manufacturers such as Tesla a rich and diverse human talent pool. For instance, according to the latest data from Tesla, more than half of its engineers are Mexicans. The 2020 USMC FTA also established a regional salary index for the automotive industry, which requires a Labor Value Content (LVC) of 40% in the manufacture of light vehicles by workers who earn $16 an hour or more in hourly wages, removing a major impediment when it comes to remuneration negotiations. Chinese EV makers and suppliers have joined Tesla to set foot in Mexico. Challenges are operations, labor and business development, among other hurdles. #Mexico #EV #GlobalEVmarket #Goglobal #USMCfreetradeagreement