Mexico's Tourism and Foreign Investment Rankings Climb

Mexico got some good economic news this week on two fronts as new international surveys showed the nation moved into the world’s top 10 tourism countries and also boosted its ranking for U.S. foreign investment.

The United Nations World Tourism Organization (UNWTO) said Mexico had moved back into its list of the 10 most visited countries in the world. This is very good news, since tourism accounts for more than 8 percent of Mexico’s GDP. By contrast, oil accounts for only about 6 percent of GDP.

In this sense, increasingly the tourism sector becomes vitally important for the country, especially in a context of a strong dollar and weaker oil market. That is why the news released a few days ago by the UNWTO is so well received by officials and policy makers.

The Multifaceted Metamorphosis Ahead for Mexico's Energy Markets

The Mexico energy market has been a hot topic ever since late 2013 when the government decided to liberalize the energy sector, opening it up to foreign investment. The reform provides an unprecedented opportunity for international companies to participate in development of the nation’s vast oil resources as PEMEX unwinds its current monopoly. Multiple other opportunities exist in the power sector, in renewable development and in the natural gas pipeline sector.

The energy reforms were largely a result of the steep decline of the country’s oil production, inadequate financial resources to turn production around and an inability of PEMEX to keep pace with the technological change taking place in the industry.

Mexico ranks sixth in the world for non-conventional oil and gas resources, right behind Canada and Algeria, but lacks the financial resources to develop its reserves. It would take US$20 billion to extract the country’s reserves over a 210-year period and $87 billion to do it in 50 years. It also would not be possible to do this with one state-owned exploration and production monopoly — this is why the reforms were necessary.

 

Why Is Globalization Less Popular in Developed Economies Today While Latin America Seems Ready to Continue Its Embrace?

There are two clear groups in Latin America: those countries in favor of free trade, mainly the Pacific Alliance (Chile, Colombia, Peru and Mexico), and hopefully Argentina, and those against free trade (the rest). In particular, Brazil has no free trade agreements. It has a closed economy, and although the depreciation of its currency aids commodity exports it has little effect on the country’s manufacturing exports. The divide between both groups can be explained by the experience individual countries have had: some have benefited more than the rest.

What’s the best way to achieve consensus about globalization with diverse interest groups as you tried to do in Mexico in the 1990s?

Free trade can be asymmetric in its distribution of benefits to the general population, and public policies should accompany free trade to make benefits more symmetric for all members of the soci-
ety. “Globalization imposes restrictions that have to be addressed with the adequate public policies.” As an example, Mexican states like Aguascalientes, Queretaro and Guanajuato (just to mention a few) have invested considerably in education and its population is generally in favor of globalization. In contrast, states like Oaxaca, Guerrero and Chiapas (among others) have done little investment in their human capital and are thus generally less in favor of globalization. Public policies matter and education should be a top priority to achieve consensus and for the general population to share the benefits of free trade. At a national level, Mexico now produces more engineers per capita than the U.S. (0.93 per 1,000 inhabitants vs. 0.75).

What’s the fix for the strong and sometimes distortive capital inflows that come with globalization?

I see three components. One: having a balanced budget that gives you the flexibility to have a small deficit or surplus when necessary. Second, a truly independent central bank that can adjust monetary and exchange rate policies to affect liquidity when necessary. Third, a flexible labor market in which it is relatively simple to hire and fire workers and in which compensation is based on productivity rather than being mainly fixed. It is also recommendable to have adequate public policies in place such as unemployment insurance for the general population to avoid the negative effects of such flexibility.

What can make immigration more acceptable in developed economies where many unskilled native workers are suffering from low wages?

An emergency training program for adults, handled at the municipal and state levels, in order to make it easier for them to either get employed again or to increase their labor income, would be one example. It is crucial to get the private sector involved in this process so that schools teach the skills that are actually demanded by the market. Mexican cuisine is a great example of the benefits of globalization, so in Mexico what food or drink would you point out to your kids as an example of the way they also benefit from globalization?

Bosch to Invest Approximately $80 Million U.S. over the Next Four Years

QUERETARO, Qro, Mexico – Bosch announced today that it has signed a property lease agreement for a greenfield site and will establish a new facility in Querétaro, Querétaro, Bajio region, in central Mexico. The announcement was made with the support of the governor of Querétaro state, Francisco Dominguez Servien; Marco Antonio Del Prete Tercero, minister of Sustainable Development of the state; and Marcos Aguilar Vega, mayor of Querétaro City. This new facility represents the first time that Bosch’s Automotive Steering division will have operations in Mexico.

Bosch will begin construction of the facility soon, with completion scheduled for the end of this year. Bosch is investing approximately $80 million U.S. over the next four years to establish the 15,000-square-meter (160,000-square-foot) facility in Querétaro. Production lines will be installed beginning in January 2017, with start of production in December 2017.

Bosch plans to hire approximately 600 associates by the end of 2019, with further growth planned.

NAI Mexico’s Mixed Use Director to Speak at Caribbean and Mexico Hotel & Resort Expansion Forum

Tijuana, Baja California – The time is here: The Caribbean and Mexico Hotel & Resort Expansion Forum is happening this Thursday 9th and Friday 10th of June at Hotel Sheraton Santa Fe, Mexico City, Mexico.

The event gathers high-level executives from Government Developers, Investors, Regulators, Construction Companies, Architects, Solution Providers, Financial Institutes and Associations in a focused two-day program. Panel presentations will share investment strategies, operations efficiency and updated technologies.

Harold Hoekstra is the national Director of the Mixed Use & Capital Markets Division at NAI Mexico and will chair: Mixed Use Development: the Next Generation. This panel will host recognized LatAm experts sharing forecasts and strategies for integrated hospitality, residential, and retail uses. Harold leads teams of experts managing strategic locations throughout Mexico, providing financial and the brokerage advisory

NAI Mexico’s Mixed Use Director to Speak at Caribbean and Mexico Hotel & Resort Expansion Forum

Tijuana, Baja California – Mexico continues to be a major focus for hotel and resort development for both local and international hotel brands and operators, due to rapidly accelerating demand during 2016. This also includes integrated Mixed Use projects, focused on a mix of residential, retail and hospitality.

The Caribbean and Mexico Hotel & Resort Expansion Forum gathers high-level executives from Government Developers, Investors, Regulators, Construction Companies, Architects, Solution Providers, Financial Institutes and Associations in a focused two-day program. Panel presentations will share investment strategies, operations efficiency and updated technologies. The event is scheduled from 9th-10th June, 2016 at Hotel Sheraton Santa Fe, Mexico City, Mexico.

Mr. Hoekstra is the national Director of the Mixed Use & Capital Markets Division at NAI Mexico. Mr. Hoekstra will chair: Mixed Use Development: the Next Generation. This panel will host recognized LatAm experts sharing forecasts and strategies for integrated hospitality, residential, and retail uses. Mr. Hoekstra leads teams of experts managing strategic locations throughout Mexico, providing financial and the brokerage advisory.

For tickets and agenda select the follow link: http://hotel2.mykar-events.com/

For more information please contact: hhoekstra@naimexico.com

Is Mexico The Next Silicon Valley? Tech Boom Takes Root in Guadalajara

Wearing shaggy beards, wire-rimmed glasses and T-shirts with silk-screened start-up logos, they look like your average 20-something coders. The young men huddle in the midday sun, smoking cigarettes, sipping coffee out of paper cups, scrolling through iPhones.

Behind them sits a bustling co-working space with 850 tech workers and dozens of start-ups building apps, tweaking online experiences, pumping out design or pay per click agency. The vibe feels much like Silicon Valley. But they’re nowhere near Northern California. They’re hundreds of miles south, in Guadalajara, Mexico’s “Digital Creative City,” the capital of the state of Jalisco, where government subsidies and affordable talent attract foreign tech giants.

Many places claim to be the next Silicon something. New York as Silicon Alley, Los Angeles as Silicon Beach. None faces the same south-ofthe-border scrutiny. Yet, there is a burgeoning scene in these agave-lined hills.

NAI Mexico to Host Regional Meeting for Mexico/Latin America Business Development

TIJUANA, Baja California— Professionals from NAI 10 offices throughout Mexico are gathering together April 28 and 29 at NAI Mexico’s headquarters, to discuss current business, plans, trends, opportunities and strategies for the future of commercial real estate in Mexico and Latin America.

CEO Gary Swedback noted, “We are very pleased to assemble such a talented group of sales and staff to focus on business development opportunities throughout Mexico, Latin America, and the Caribbean. We are also honored to host alliance partners and visitors from Chicago, New York, Los Angeles, and Toronto.” Mr. Swedback also cited the Panamericas initiative, created by NAI Mexico, as a way to offer global clients consistent service from Mexico to the Caribbean, and throughout South America.

NAI Mexico is an exclusive member of NAI, the world’s leading managed network of commercial real estate firms serving over 375 markets worldwide.

NAI Mexico supports both Mexican and global clients through a platform of 10 offices in Mexico. In addition to traditional leasing and sales, NAI Mexico offers additional integrated services for design and construction, project management, valuation, capital markets and supply chain solutions.

For more information contact: aflores@naimexico.com / 619-690-3029

Ford to Build a New Plant in Mexico
  • Ford is investing in a new plant in Mexico’s San Luis Potosi State to produce more small cars
  • The $1.6 billion USD investment will create 2,800 additional direct jobs by 2020
  • Construction begins this summer, with new small cars expected to start rolling off the line in 2018

MEXICO CITY, April 5, 2016 – Further increasing its competitiveness, Ford is investing in a new small car plant in Mexico, building a new manufacturing site in San Luis Potosi State.

Ford is investing $1.6 billion USD in the facility, which begins construction this summer. The new plant will create 2,800 additional direct jobs by 2020.

Specific vehicles being produced at the new facility will be announced later.

This investment comes during Ford’s 91st year in Mexico, including manufacturing vehicles since 1925. Ford and its 116 dealers this year also are celebrating 50 years of strong educational programs, including the construction and maintenance of nearly 200 rural schools throughout the country.

Mexico is Ford’s fourth largest vehicle manufacturing site for global customers – behind the U.S., China and Germany. Vehicles produced in Mexico also serve customers in the U.S., Canada, China, Argentina, Bolivia, Brazil, Colombia, Chile, Paraguay, Peru, Uruguay and South Korea.

The investment is part of the company’s One Ford global product and manufacturing plan. During the past five years, Ford has invested more than $10.2 billion in Ford facilities alone in the U.S. In addition, Ford has invested $2.7 billion in facilities and supplier tooling in Spain, $2.4 billion in Germany and – with the company’s partners – $4.8 billion in China.All of these investments are part of the company’s plan to serve global markets and deliver profitable growth.

NAI Mexico SVP, Juan Carlos Rodriguez to Speak at FUTURE OF U.S. / MEXICO REAL ESTATE Event

Tijuana B.C. Mex, NAI Mexico is pleased to announce that Juan Carlos Rodriguez will be a featured speaker at The Future of the Cali Baja MegaRegion Conference, organized by BISNOW. The event will be held April 7, 2016 at Sheraton Hotel and Marina, in San Diego, CA.

Mr. Rodríguez, who manages the Corporate Solutions group within NAI Mexico’s 10 offices in Mexico, and coordinates projects in Mexico and Latin America, will participate on a global expert panel discussing the trends shaping the future of both the region and Mexico.

This will be the first Cali Baja Bi-National Mega Region event. Attendees will receive a combination of investment and development-focused presentations sharing trends and competitive intelligence from an elite panel assembled for this conference.

Specific topics will include:

  • Global firms and changing future requirements in the region
  • Current Trends for regional and global operations
  • Real Estate Development
  • Changes in operating costs in the region

Attendees will also have the opportunity to arrive early and stay late for plenty of coffee and ample networking time — we’ll see you there!

For more information contact: aflores@naimexico.com / 619-690-3029