Mexico – an Attractive Business Location

White sand beaches, Caribbean Sea, tropical forests, Aztec temples – Mexico has much to offer. With a gross domestic product (GDP) of USD 1,144 billion, Mexico is the largest economy in Latin America after Brazil and ranks 15th among the world's largest economies.

As an exporting nation, it occupies the 12th place of the World and No. 10 among the importing countries. Despite the peso depreciation and the rapid decline of the oil Price  a third of the state's revenues are generated in the oil sector – the Mexican economy has demonstrated to be crisis-proven and continues to grow. For the current year 2017 the government expects an increase of two to three percent of GDP.

Mexico is an important economic partner for German industry in Latin America. And Germany is Mexico's most important trade partner in the EU. In 2015, bilateral trade has grown by about 20 percent and Mexico has become the largest export market for German industry in the region.

With 122 million inhabitants, Mexico is one of Latin America's most industrialized countries: VW, Audi, Daimler and soon BMW – all German carmakers esteem the country as an interesting production location. In recent years, Mexico has become the largest automotive producer in Latin America and is now seventh in the world.

In addition to the automotive sector, Mexico also focusses on information & communication technologies, aerospace and oil and chemical industries. Growth sectors are also renewable energies, mechanical engineering and health care.

Ongoing productivity increases in the manufacturing industry, relatively stable labour costs and economic reforms in the area of infrastructure and tax have created framework conditions that make Mexico interesting for investors. The result can be seen: Over 1700 companies with German capital participation are active in Mexico, which have made investments of around 30 billion US dollars.

In the region, Mexico also scores with a reliable economic policy based on deregulation, stability and open markets. The country is one of the world's most open markets and is closely linked to numerous free trade agreements with 45 countries – since 2000 with the European Union. The Mexican economy is particularly benefiting from membership in the Pacific Alliance and the North American Free Trade Zone, NAFTA. 80 percent of Mexican exports goes to the USA.

However, Mexico also faces major challenges, particularly in terms of security, combating drug-related crime, corruption and institutional weakness, as well as a lack of the rule of law. As an emerging economic hub, Mexico must also focus more on education, urban development and the environment.

The potential, the dynamism and the economic framework conditions of Mexico offer a good location for German companies. At the same time, investment from Germany makes an important contribution to the economic and social development of the Country – and is thus also a key to prosperity in Mexico.

For this reason, the country has also played a particularly important role in the international cooperation of BDI for many years. This is reflected, for example, in the partnership agreement between BDI and the Mexican associations COPARMEX and USEM, which has existed since 2010. With the joint project „Innovations Partnership Germany – Mexico / Pacific Alliance“, funded in 2013 by the German Government through development organization SEQUA, the cooperation with Mexico and the partners in the Pacific Alliance has been further strengthened. The focus lies on strengthening sustainable entrepreneurship and competitiveness in Mexico and the countries of the Pacific Alliance through know-how transfer and exchange of experience.

The German economy is also interested in modernizing the EU-Mexico Trade Agreement. The BDI accompanies and supports the negotiations intensively.

A highlight of the current German-Mexican cooperation is the  „Germany Year in Mexico“ and „Mexico Year in Germany“, which are supported by BDI as a project partner. Numerous large-scale events of business, politics, culture and science intensify the close contacts in the „Dual Year“.