Mexico´s natural advantages• Population of over 107 million. • Average age: 27 years.• Key geo‐strategic position.• 3,219 km of land border with the USA.• 11,000 km of coast line. • 38 commercial ports.• Balance of Trade 2010*:

• Exports 24 996.4 millions of US dollars.

• Imports 25 336.9 millions of US dollars.

• Source: INEGI “Mexico’s Balance of Trade” June 2010.

Mexican Automotive Industry ProfileAgenda

1. AMIA´s Report.

2. ANPACT´s Report.

3. Overview.

4. Global Perspective.

5. Auto Industry Localization (OEM´s & Auto Parts Suppliers).

6. Investing Incentives.

7. Automotive Platforms & Projects.

8. Government Strategy.

9.Opportunities in Mexico.

Period Total  Production Exports Domestic Sales

Jan – July  09Jan – July 10Difference %Total Difference 

711,3571,257,734

76.8 %546,377

575,5611,031,393

79.2 % 455,832

412,732432,926

4.9 %20,194

AMIA´s Report 2009 vs. 2010

Source: ProMéxico with data from AMIA.

• Recovery in the industry is starting to take place.• The big companies are implementing new business strategies:

•Product specialization.•Flexible platforms.•Design, Research and Development in Mexico.

Period Total  Production Exports Domestic Sales

July 09July 10Difference %Total Difference 

108,897180,08365.4 % 71,186

90,872143,52157.9 %52,649

56,44361,9599.8% 5,516

AMIA´s Annual Report: July 2010

Source: ProMéxico with data from AMIA.

Period Total  Production Exports Domestic Sales

June 09June 10Difference %Total Difference

5,1297,11038.6%1,981

3,8404,91628%

1,076

1,8792,57036.8%691

Period Total  Production Exports Domestic Sales

Jan – June  09Jan – June  10Difference %Total Difference

26,46647,41179.1%20,945

19,19434,97982.2%15,785

11,00315,27438.8%4,271

ANPACT’S Report 2009 vs. 2010

Source: ProMéxico with data from ANPACT.

Autoparts demand in Mexico (Billions of dollars)

2009 2008

Production 41.2 58.3

Exports 25.5 35.9

Domestic Sales 15.7 22.4

Imports 18.7 28.4

TOTAL 59.7 86.7

Autoparts exports represent around 11% of Mexico’s total exports.

90% of autoparts production is for the US market.

Mexico remains as the US autoparts supplier # 1.

Source: Ministry of Economy with data from INA.#

Ove

rvie

wAutoparts Production*

(Billions of dollars)

$‐

$10.0 

$20.0 

$30.0 

$40.0 

$50.0 

$60.0 

$70.0 

2005 2006 2007 2008 2009

There are around 1 million employees related to the Mexican Automotive Industry

Autoparts industry 433,000

OEM´s 55,000

Dealerships 83,000

AftermarketProducts 167,000

Mechanic shops 322,000

Source: Ministry of Economy with data from INEGI & INA.

Ove

rvie

w

Free Trade Agreements Network

FTA EU

FTA Chile

FTANicaragua

FTACosta Rica

FTA Bolivia

FTAColombia

NAFTAFTA Japan

FTAHonduras

El Salvador &Guatemala

FTA Israel

MERCOSUR:- Brazil- Argentina- Uruguay- Paraguay

• The world´s largest free trade agreements network (12 FTAs).• Preferential Tariff Access to 44 countries.• Automotive business opportunities in three continents (America, Europe, Asia).• Competitive advantages in: High qualified labor force, logistics, low country risk,

economic stability, business environment.

Glo

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ersp

ectiv

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NAFTA

World wide automotive manufacturing(Million of units)

Mexico is number 10th in the word wide automotive manufacturing ranking

Source: International Organization of Motor Vehicle Manufacturers (OICA) and Ward´s Auto Info Bank, figures to 2009.

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ectiv

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0

2

4

6

8

10

12

14

16

Who is producing in Mexico?

• GM• Ford• Chrysler• Nissan• Honda• Toyota• Volkswagen• BMW

• Freightliner• Scania• Volvo• Mercedes Benz• Kenworth• International• Volkswagen• Giant Motors

• Detroit Diesel• Man• Cummins

Passenger vehicles Commercial vehicles Engines

YUCATAN

North

Central

Bajío

COAHUILA

D.F.QRO.

HERMOSILLOFORD

(PC)

SALTILLOCHRYSLER

(ENGINES & UV)

AGS.

NISSAN

(PC & ENGINES)

GTO.

G.M.

(UV)

SANTIAGOM.BENZ (PC & UV)

SILAO

AGS.

V.W.

(PC & ENGINES)

PUEBLA

HONDA (PC) GUADALAJARA

SONORACHIHUAHUA

G. PALACIOLINAMAR

(ENGINES)

MOR.

NISSAN

(PC & UV)

CIVAC

DURANGO

ZACATECAS

S.L.P.

TAMPS.

COLIMA MICHOACAN

GUERREROOAXACA

CHIAPAS

TABASCO

CAMPECHE

HIDALGO

TLAX.MEX.

PUEBLA

NUEVO

LEON

RAMOS

ARIZPEG.M.

(PC & UV)

TOLUCAG.M. (ENGINES)TOLUCA

CHRYSLER (PC & UV)

BMW (PC)

CUAUTITLANFORD

(PC & UV)

CHIHUAHUA

TOLUCA

GARCIA

TULTITLANMASA (TRUCKS)TOLUCAVOLVO (TRUCKS)

MEXICALI

S.L.P.

SCANIA

(TRUCKS)

NAVISTAR (TRUCKS)

JALISCO

TIJUANA

MICHOACAN

S.L.P.

Mexican Automotive Industry Geographic Location

COAHUILA

FREIGHTLINER

Central & South

PUEBLA

AUTOCRISTALES DE ORIENTEAUTOTEKBENTELERBREMBO RASSINIFEDERAL MOGULFTE MEXICANAHP PELEZER AUTOMOTIVE SYSTEMSJOHNSON CONTROLSKAUTEX TEXTRONKIEKERT DE MEXICOLAGERMEXLUKPARKERHANNIFINPLASTIC OMNIUMSIEMENSSKFSOMMER ALLIBERT INDUSTRIES DE MEXTENNECOTHYSSENKRUPP METALURGICATHYSSENKRUPP PRESTATRW SISTEMAS DE DIRECCIONES

DISTRITO FEDERAL

ASSOCIATED SPRINGBOCAR BOSCHCALSONICEATONFIRESTONEGONHERGOODYEAR-OXOHITCHINER MANUFACTURINGMANN HUMMELMETALDYNEMICHELIN CORPORATIONMODINE MEXPARMORESA INDUSTRIALNAL. DE CONDUCTORESVITRO

TLAXCALAARCOMEXAUNDE TEXELCONDUMEXEMPRESAS CA-LE DE TLAXCALAEUWE EUGEN WEXLERFORJAS SPICERGRAMMER AUTOMOTIVEIDEAL ESTÁNDARJOHNSON CONTROLSKEIPERSIANT-GOBAINVMS FLOCKTECHNICK DE MEX

MORELOS

BERUBRIDGESTONEFIRESTONEFREUDENBERG-NOK DE MEXSAINT-GOBAIN SEKURITTEMIC

VERACRUZ

AVON RUBBER P.L.CSIEMENSTAMSA

HIDALGO

CITSA PPG

YUCATANAIR SYSTEMAIR TEMPAXA YAZAKI

CHIAPAS

AXA

ABB MEXICOANSORGEALVAREZ AUTOMOTRIZAUTOSEATBARDAHLBASFBOSCHCLEVITECRISTALES INASTILLABLES DE MEXDANA HEAVY AXLESEAN SAEATONECHLINFEDERAL MOGULFPAGABRIEL DE MEXICOGATES RUBBERGOODYEAR TIRE & RUBBERHAYES LEMMERZHAYES WHEELS ACEROHELLA KG HUECK & COHENKEL KGAAINDUSTRIAS TAMERKRUPP HOESCHLEAR CORPORATIONLIBERTY MEXICANALORD DE MEXICOMAGNA INTERNACIONALMECASAPARKER HANNIFINPERKINGS INDUSTRIESSARNAMOTIVE BLUE WATERSEALED POWER MEXICANASKD DE MEXICOTI AUTOMOTIVETRELLEBORG YSHVALEO SYLVANIAZF HOLDING

ESTADO DE MEXICO

Central West Coast

VALEO MATERIALES DE FRICCIONVAN ROB STAMPINGSVISTEO CLIMATE SYSTEMSWOCO

QUERETARO

ABC.GROUP CanadáAMERICAN CAR EQUIPMENTARNESES ELECTRICOS AUTOMOTRICESARVIN DE MEXICOASPERMEXAUMA-TECAUTOLIVAUTOPARTES WALKER BROSEBTICINO DE MEXICOBYPASA (SAN LUIS RASSINI) CLARIONCOLLINS & AIKMAN GROUPCORDA CORPORATIONDELBAR PRODUCTSDELPHIDURA AUTOMOTIVE SYSTEMSEATONFORJAS SPICERFRENOS Y MECANISMOSGRAMMER INDUSTRIALGUARDIAN INDUSTRIESHARADA INDUSTRIESHBA CAST PRODUCTSHI-LEXINTERIORES PRINCE (JCI)IRIZARJOHNSON MATTHEYK.S.B MEXICOKOSTALMAGNA MIRROW SYSTEMS DE MEXICOMERITOR MEXICANANEW HOLLANDNIHON PLASTNORANDAOMNI MANUFACTURINGPPG INDUSTRIESROCKWELL SIEMENS TRE MEC TRW SISTEMAS DE DIRECCIONES

A. SHULMANALFRED ENGELMANN DE MEXICOARVIN DE MEXICOCONTINENTAL AGCONTITECHCUMMINS DIESELDANA HOSE & TUBINGDANA LONG MANUFACTURINGDELCO REMY COMPONENTSDELCO REMY REMANUFACTURINGEAGLE-PICTURE INDUSTRIESEATONEDSCHAINDUSTRIAL BLAJUROBERT BOSCHTHYSSENKRUPP SASAVALEO SISTEMAS ELECTRICOSVALEO TERMICO

SAN LUIS POTOSI

AGUASCALIENTES

BOSCHBUSSCARCALSONICCOOPER STANDARDCOROPLASTFORJAS Y MAQUINASFRENADOS MEXICANOSGESTAMPINDUSTRIA DE ASIENTO SUPJATCOK & S MEXICANAKANTUSMARCOPOLOMORESTANAMOTO DIESELNABCO MEXICANAOYAMSAPOLO MEXRESORTES MONTICELLOSANOH INDUSTRIALSEALED POWER MEXICANASIEMENSUNIPRESS MEXICANAYOROZU

ZACATECAS

AXA YAZAKIDELPHI CABLEADOSORO CONTROL

JALISCO

AP TECNOGLASS DE MEXAUTOPARTES ETRBORGWARNER MORSE TEC MEXCARBU-PARTSCAUSAMEXCR MEXICANA EQUIPO AUTOMOTRIZ HELLAGRUPO FERRAU INDUSTRIAS DE ASIENTOJABIL CIRCUIT DE MEXICOK & S WIRE HARNESSMODINE/MEXPARPIONEER STANDARROCKWELL AUTOMOTIVEROLAMEXS & Z ROLMEXSAARGUMMISACHS BOGESIEMENS VDOSUMIDASUNNINGDALESÚPER DIESELTAKATATECNOPARTSVOGT ELECTRONICSWEBB DE MEXICOYAMAVER

GUANAJUATO

AMERICAN AXLEARBOMEXARNESES ELECTRICOS AUTMOTRICESAUTOENSAMBLES Y LOGISTICAS

TAMAULIPAS

ALPINE ELECTRONICSAMMEX PRODUCTSBBB INDUSTRIESBREED TECHNOLOGIESBRONCO ELECTRONICSCATERPILLARDELCODELPHI ALAMBRADOS AUTOM.EATONFERMAGFUJITSU TENGLOBE MOTORSGODAMGSW MANUFACTURINGHAYES LEMMERZ INTINVESNSYSITT AUTOMOTIVEKIMKOKONGS BERG AUTOMOTIVEMATSUSHITA ELECTRONICMIKUNI TEXASMINNESOTA RUBBERMODINENAFTEKPARKER HANNIFINPRECISION CABLE MANUFACTURERPULLMEXSAINT-GOBAINSIEMENSSTANDARD MOTOR PRODUCTSTELEFLEXTENNECO AUTOMOTIVETI AUTOMOTIVETROSTELTRW ELECTRONICA ENSAMBLESTRW VEHICLE SAFETY SYSTEMSUNIROYAL CHEMICALUNITED TECHNOLOGIESVALEOVALEO SYLVANIAVELVACVISTEONWELLS MANUFACTURING

SUPERIOR INDUSTRIESTDK USA CORP.TRW OCCUPANT RESTRAINTSTRW STEERING WHEELS SYSTEMTYCO INTERNATIONALVALEOVISHAYVISTEONWARNERYAZAKI NORTH AMERICA

North East

CHIHUAHUA

A.O SMITH CORP.ALCOA FUJIKURAAUMAAVON AUTOMOTIVEAVX CORPORATIONBERGEN CABLEBREED TECHNOLOGIESCAPSONIC AUTOMOTIVECARLISLECOILCRAFTCOOPER INDUSTRIESCRONICUMMINS DIESELDANA CORPORATIONDELMEX DE JUAREZDELPHIEAGLE OTTAWAEATONELECTRISOLAFEDERAL MOGULGOOD YEAR TIRE & RUBBERHAYES WHEELS ALUMINIO HOMELITEHONEYWELLI.T.E.S.A.ITT AUTOMOTIVEJOHNSON CONTROLSKENWOODKEY PLASTICSLEAR CORPORATIONLEONI CABLELETTS INDUSTRIESMANESAMORAINENICHIRIN COUPLERROBERT BOSCHSATURN ELECTRONICSSETONSHELDAHL TECHNOLOGIESSIEMENSSSI TECHNOLOGIES INCSTONERIDGESTRATTEC SECURITYSUMITOMO

COHAUILA

A.O SMITHALCOA FUJIKURAALLIED SIGNAL-HONEYWELLAUTOTEK INDUSTRIAL DE MEXBENTELERBROWN CORPORATIONCASTECHCATERPILLARCIFUNSACITATION TOOLSCNI.INCCOOPER STANDARDDELPHI DIESEL SYSTEMSDOUGLAS & LOMASONFEDERAL MOGULFINDLAY INDUSTRIESFLAMBEAU PLASTICSFOAMEX CORPORATIONGENERAL DE CABLE MEXGM PROCESSINGIRVIN AUTOMOTIVEJOHN DEEREJOHNSON CONTROLSKAY AUTOMOTIVELARGERMEXLEAR SEATINGLINAMARMAGNA INTERNATIONALMAGNA SEATING SYSTEMSMAHLE PISTONESMANNESMANN-SACHS AGMASCO TECHMETALDYNEOXFORD AUTOMOTIVEPILOT INDUSTRIESPLASTIC OMNIUMPSA WIRING PRODUCTSSAN LUIS RASINNITAKATATECHNOTRIMTENN-MEXTEXTRON-AUTOMOTIVETWBVEHYCO

NUEVO LEON

A.O SMITH CORP.ABB MEXICOACCURIDEAISISN SEIKIALCOA FUJIKURAALLIED SIGNALAMERICAN WHEELSANCHORLOKARNECOMARVIN MERITORAUTOCLIMASAUTOM. WIRE HARNESSESCAMISACARPLASTICCARUSICATERPILLARCNWDANADELPHIDENSODONNELYENERTEC MEXICOGOODMANSGOODYEARGUNTNERHAYES LEMMERZ  INT.HOLLANDERHUSSMANJOHN DEEREKEY PLASTICSLEAR CORPLORD CORPMETALSAMITSUBAMISTSUBISHIMOTO REDUCTORES USNEMAKPARKER ZENITHPIOLAXPIONEERSIEMENSSUMITOMOTAKANISHITAKATA

TAPEXTEKNIKTHOMAS & BETTSTHOMAS BUILT BUSESTI AUTOMOTIVETOKIO ELECTRICATOYOTA TSUSHOVEGE DE MEXICOVISTEON‐CARPLASTICVITRO

North East

BAJA CALIFORNIA

AMERICAN EAGLE WHEELSAMERICAN RACINGATC DSITRIBUTION GROUPAUTOLIVBOSCHCOTO TECHNOLOGIESCOVERCRAFT INDUSTRIESECO-AIR PRODUCTIONENERGY LABSFURUKAWA ELECTRICGONHERHIKAM ELECTRONICAHONEYWELLHOOKER INDUSTRIESHYUNDAI TRANSLEADINTERNATIONAL RECTIFIERSISOCLIMA AméricaKAMITA INTERNATIONALKYOCERALEVITONMANIK MOTORSMARKO FOAM PRODUCTSMATSUSHITA-AROMATMORGAN POLIMER SEALSNKS SAFETY TECHNOLOGYPARKER HANNIFINPILKINGTONPIONEERPRIMEQUALITY POLISHING INTERNATIONALTHE BUDD COMPANYTHOMSON INDUSTRIESTT ELECTRONICSVISHAY ELECTRONICSWABASH TECHNOLOGIESWATKINS MANUFACTURING

SONORA

ALLIED SIGNALAMER MEX PRODUCTSATRONICSBENTELERBREED TECHNOLOGIESCHAHTA ENTERPRISE CHARLES E. GILLMANDELPHI AUTOMOTIVEEXEMPLAR MANUFACTURINGHYDRO NORTH AméricaITT INDUSTRIESLEONI WYRINGS SYSTEMSMOLEXNOMA AUTOMOTIVEOXFORD AUTOMOTIVEPRESTOLITE WIRE CORP.ST. CLAIR TECHONOLOGIESTAKATATHE INTEC GROUPTRWTSE BRAKESTYCO ELECTRONICSVELCROWALBRO (TI AUTOMOTIVE)YAZAKI

SINALOA

SELMECSUMITOMODELPHIWALBRO ENGINE MANAGAMENTMEXICORVOS

ELECTRIC DE DURANGO (GRUPO ARMAS)LINAMARSUMITOMOYAZAKI NORHT América

DURANGO

North West

Programs Fostering R&D:• Science and Technology Fund for R&D, technology development ortechnology transfer.• Income Tax Credit on projects for R&D, process and product design.• Support Program for the Development of New Enterprises Based onScientific and Technological Advances (AVANCE).

Tax Incentives:• Special incentives for Strategic Projects (Automotive, Aerospace,Electronic, Nanotechnology).• Immediate Capital Investment Deduction.• Reduced income tax and trade facilitation programs for export orientedcompanies.• Reduced Social Security liabilities for first time employees.

Investing Incentives in Mexico

Labor Training:

• Labor Training support programs.• Special scholarships for international in house industrialtraining for engineers abroad.

State and Local Incentives:

• Infrastructure.• Land reserves and build to suit leasing available.• Property tax of payroll tax credits.

Investing Incentives in Mexico

Mexican Production

Company Model TypeFusion*, Milan* & 

Lincoln MKZMedium/Luxury

*including hybrid versionBora / Jetta (sedan & 

Variant)Medium/Compact

HHR Crossover

PT Cruiser & Journey Crossover & SUV

Tacoma Pick‐up/Luxury

Tiida (Versa in the US) Compact Sedan & HB

New CR‐V SUV

Projects 2007 - 2010

Company Project 4.1 Billion USD Investment:

San Luís Potosí: New Aveo Facility.Silao, Guanajuato: New Transmissions Plant & Engines Expansion.Ramos Arizpe, Coahuila: New Captiva Sport (Saturn Vue Hybrid) + 

New Cadillac SRX + Transmissions & Engines plant.3 Billion USD Investment:Cuautitlán: New “Fiesta”.

Chihuahua: New Diesel Engines (expansion).Guanajuato: New Getrag Transmissions Plant.

1 Billion USD Investment:Puebla: 2nd Facility for a New Vehicle (2010).

550 Million USD Investment:Toluca: 1st. Chrysler / FIAT Strategic Project: FIAT 500 (2011).

President Calderon´s strategy for the Mexican Automotive Industry

Automotive Sector as the industrial activity priority number one!

Focus on Competitiveness and Technological Innovation.

More aggressive and more focused on support schemes (builton what we already have).

Maximize synergies with others successful Industries in Mexico.

Linkage between Academia, Industry & Government.

Taking advantage of the benefits of the largest FTA Network.

Sector Strategy

Automotive Decree.

Specialization.

More quality, more added value.

Duty free import vehicles to offer in Mexico.

Competitive parts and components.

Commercial world wide opening.

Opportunities in the AutomotiveIndustry in Mexico

1. Foundry:

Grey Iron (30 tons and over).

Nodular Iron (connecting rods, cams, crankshafts, calipers).

1. Cold & Hot Forging (small and large parts).

2. Plastic Injection Molding.

3. Aluminum Die Cast.

4. Precision stamped and machined parts.

5. Tooling (production & Service).

Mexico’s Investment MapMIM

http://mim.promexico.gob.mx/

• With this tool, developed specially for site selection professionals, you will find,in a quick and simple manner, the main drivers that make Mexico an excellentlocation to start-up a business or relocate production capacities to Mexico.

• Information concerning Mexico’s infrastructure and production base, in a widevariety of economic sectors, will also be at reach. Our data base containsdetailed information at the state and regional level, which is greatly relevant forcompanies that are evaluating the best location alternative within Mexico.

Emilio MossoAutomotive IndustryEmilio.mosso@promexico.gob.mx

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