Nori Kawamura our Business Development Manager and our main liaison with the Japanese manufacturing market gives us his insights about the strategic alliance between Mexico and Japan.
Q1: To start, what are the attractive points for the Japanese companies, in terms of North American investment?
A: I can say that the business opportunities on this continent have been discovered, for Asian companies in general. Despite the fact that for Japan, undoubtably the United States has been one of the largest commercial partners along with China, there is technology and innovation that Japan can still introduce to the North American market. Meanwhile, Mexico has been the important manufacturing base of this region during various decades, at the same time being the strategic point for the expansion toward all of Latin America.
On the other side, the Asian market has already been highly explored, which already increased the level of competition both with Chinese and South Korean companies as well as other countries that acquired the knowledge of the Japanese companies, apart from the competition among other Japanese companies.
Q2: In Mexico, what has Japan´s preference been regarding investment?
A: In the last 5 years, the number of the Japanese companies has almost tripled in all of Mexico, today there are approximately 1,200 companies operating in diverse industrial sectors.
The state governments also seek close communication with Japanese companies, facilitating the life of the expats and their families, and Mexico already has three full-time schools that teach Japanese, where the children of said expats study.
Q3: What are the advantages of North American operations?
A: Many companies of the same region, like Europe, have taken advantage of the characteristics of North America in the following ways: in Mexico, the cost of direct labor has remained relatively low. Today in day, various Asian countries such as Thailand no longer offer this advantage, and Mexico is still a few decades away from the population starting to mature: much of the labor force found is young. On the other hand, the unit cost of energy continues to be lower than the United States, allowing a more automated manufacturing.
In short, each company puts together different strategies dependent on the advantages of each country or zone of North America.
Q4: What are the potential industries that Mexico can receive?
A: The Mexican territory is five times larger than in Japan. It is important that we divide the Mexican territory by geographic zones such as north, northwest, center, east, south and southeast which correspond to different industrial characteristics.
The northern zone is where there is more concentration of diverse industries, but above all steel and metal mechanic. Additionally, there are already Japanese companies mainly around the city of Monterrey, that are dedicated primarily to the fabrication and exportation of auto parts to the United States.
In the northwestern zone, there are many manufacturing facilities from the pharmaceutical and health industry as well as aerospace.
Many diverse industries are found in the central and eastern zones, from textile to electronic. The automotive industry has expanded massively in the most recent years.
The best place to start is here.
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