Car Production

0

1000

2000

3000

4000

2013 2014 2015

Productioninthousands MexicoBrazil

Source:AMIA– Asociacion Mexicanadelaindustria automotriz.

Source: Eurostat (EU27 projections)

Mexico’s Expanding Middle Class

Source:BBVA.Notes:Incomerangesaredefinedhomogenouslyforallcountries.Poorisupto$1,000USDperyear,lowincomeisfrom$1,000to$5,000USD,lowmiddleclassisfrom$5,000to$15,000USD,mediummiddleclassisfrom$15,000to$25,000USD.highmiddleclassisfrom$25,000to$40,000USD,andaffluentisover$40,000USD.

0

10

20

30

40

50

2020

$40,000+

$5,000‐15,000

Percentofpopulationin2020,byincomerange

<$5,000

$25,000‐40,000

AffluentPoor

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Reforms are paying off

3Source: ProMéxico with information from the SHCP. Annual variation, December 2015.

40.7% in international longdistance rates

16.8% in mobile rates

16.8% in landline rates

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Engineering Graduates in 2015 (per 1,000 inhabitants) 

Source: Forbes, World Economic Forum.

Some Current Highlights: Engineering Graduates (1/2)Mexico is one of the leading countries in America in producing Engineers…

Engineering Graduates in 2015 

1.19

0.93

0.75 0.73

0.37 0.33 0.19 0.17

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Chile Mexico United States Canada Brazil Argentina Guatemala Uruguay

237,826

113,944

74,539

25,722 21,037 13,603 2,943 590

0

50,000

100,000

150,000

200,000

250,000

United States Mexico Brazil Canada Chile Argentina Guatemala Uruguay

Mexico’s High-end Technology Trade

0

10

20

30

40

50

60

70

$U.S.billions

ExporttoU.S. ExportRestoftheWorld ImportfromU.S.

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• The manufacturing sector, particularly the automotive industry, has boosted industrial activityin Mexico since the 2009 crisis

• Despite global weaknesses, the manufacturing sector will remain competitive during thecoming 5 years due to current investments and competitive unit labor costs

• Mining continues to weight heavily in the industrial activity in Mexico, because of the generaldecrease in commodity prices and due to the fact that three fourths are oil

Industrial Activity by Sector (2008=100) 

Source: INEGI.

Manufacturing Exports (Jan 2008=100) 

Mexico’s Competitiveness: Industrial ActivityA competitive manufacturing sector

85

95

105

115

125

135

2008 2009 2010 2011 2012 2013 2014 2015 2016

Mining Electricity Construction Manufacturing

507090

110130150170190210230250

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Manufacturing Automotive Other

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Improvement or no changeReduction of 1 to 4 pointsReduction of 5 to 9 points

Reduction of 10 to 14 pointsReduction of 15 or more pointsCountries not part of the 25 largest exporters

Mexico and the US are the winners in competitiveness at the global level

Source: “The Shifting Economics of Global Manufacturing”, BCG (2014). The labor component is adjusted for productivity.

“Rising Global Stars”

Mexico’s Competitiveness: Manufacturing ComparisonChange in manufacturing costs from 2004 to 2014, 25 largest exporters (index)

ChicagoAssemblyPlant 1924 KansasCity,MO 1951 Oakville,Ontario 1953 LouisvilleAssemblyPlant 1955 MichiganAssemblyPlant 1957 Cuautitlan,Mexico 1964

Active Ford Plants in North America

KentuckyTruckPlant 1969 OhioAssemblyPlant 1974 Hermosillo,Mexico 1986 FlatRockAssemblyPlant 1987 DearbornTruckPlant 2004 SanLuisPotosi,Mexico 2018

Advanced Economies vs. Emerging and Developing Economies

Source: International Monetary Fund.

30

35

40

45

50

55

60

65

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

ShareofworldGDP(%),basedonpurchasing‐power‐parity(PPP)

AdvancedEconomies

• LatinAmerica• Africa• MiddleEast• Asia(excl.Japan)

Emerging&DevelopingEconomies{

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US imports from selected countries (% of total)

Average manufacturing unit labor cost in China and Mexico (USD per hour)

Mexico’s Competitiveness: Market Share/Lowering Costs relative to China

Source: Economist Intelligence Unit, US Department of Commerce.1) Estimate based on Global Insight.

China is losing competitiveness because of: an increase in wages larger than its productivity growth, derived from its demographics, higher transportation costs and the Yuan’s appreciation

Mexico

China

Canada

1990 2000 2014 2018

6.1

3.1

18.4

11.2 12.5 17.0

8.2 19.9 15.8

19.0 14.8 13.9

Japan 18.1 12.0 5.7 5.4

California’s Changing FacesCalifornia’s Changing FacesPopulation 2014Population 2014

Blacks2.5million

Asians5.6million

Hispanics15.0million

European14.9million

Sources:Moody’s,U.S.CensusBureau.

California’s Changing FacesCalifornia’s Changing Faces

Black6.5% Asian45.0% Hispanics35.6%

European(7.0%)

Sources:Moody’s,U.S.CensusBureau.

Population Growth (2000 - 2014)Population Growth (2000 - 2014)

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Some Current Highlights: TourismNumber of International Tourists (left axis) and Revenues from International Tourists (right axis)

Source: World Tourism Organization.

The number of international tourists visiting Mexico increased considerably since 2013, partly explained by the introduction of low cost carriers into Mexico

Mexico is now the #9 tourist destination in the world and it is the one with the highest relative growth in visitors in the last 3 years

USD$ BMillionPeople

21.9 21.4 21.622.9 22.3 23.3 23.4 23.4 24.2

29.332.1

18.3 19.120.7 21.7

18.9 20.0 20.021.5

23.7 24.2

29.1

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Top 10 Visited Countries in 2015 (millions)

2012‐15 CAGR

86.3

77.968.1

56.950.8

39.335.033.9

32.1

31.6

FranceUSASpainChina

ItalyTurkeyGermanyUKMexicoRussia 8.3%

11.1%5.1%4.9%3.4%3.1%0.0%5.9%5.4%1.7%

Mexico’s Population