Mex Mission Presentation

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February 2007 2007 US Commercial Service 1

2007 Automotive Trade

Mission to Mexico

March 26 30, 2007


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Agenda

WhoWe Are - Brian Miller, International Trade Specialist, U.S.Commercial Service.

Understanding Mexico - Daniel Crocker, Commercial Consul, andErnesto de Keratry, Sr. Commercial Specialist, U.S. ConsulateGeneral Monterrey, Mexico.

Mexico's Automotive Industry 2007 - Crocker, de Keratry.

Why This Mission? Crocker, de Keratry.

Tips on Doing Business in Mexico - Crocker, de Keratry. Conclusion, logistical details Kristian Richardson, International

Trade Specialist.

Q&A - all of the above speakers.


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Who Are We?

The U.S. Commercial Service is a front-line, export promotion unit ofthe U.S. Department of Commerce.

We exist to promote and protect U.S. commercial interests abroadand work to ensure that U.S. businesses successfully compete in theglobal marketplace.

This is facilitated through our network of Trade Specialist in over 100offices around the U.S. and Commercial Specialists within U.S.Embassies and Consulates in over 80 countries around the globe.

In fiscal year 2006, we assisted more than 69,000 U.S. exportersachieve over $63 billion in export sales.


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The U.S. Commercial

ServiceAutomotiveTeam

The USCS Automotive Team is made up of specialists from aroundthe globe that are dedicated to assisting U.S. companies within thevarious automotive sub-sectors.

The Automotive Team supports 4 key categories:

Products OE and Aftermarket components.

Manufacturing and Testing Equipment products used in

manufacturing plants, vehicle repair facilities, etc. Services automotive engineering and consulting.

Vehicles includes cars, trucks, buses, specialty vehicles.


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How the USCS Automotive

Team canHelp You

The USCS Automotive Team can provide assistance on where opportunitiesfor your products may exist and how to effectively and efficiently reach thosepotential customers.

Market Research find the answers you need to make an educated decisionfor market entry.

Matchmaking locate qualified overseas agents, distributors, end-users foryour products.

Due Diligence know who you are doing business with.

Key Events Overseas trade missions and trade shows supported by U.S.Embassy staff are a cost effective way to understand the market and reachnumerous potential customers.


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Who WeArein Mexico

Daniel Crocker Commercial Consul in Monterrey.

Ernesto de Keratry Senior Commercial Specialist inMonterrey.

Lora Baker Commercial Consul in Guadalajara.

Alicia Zayas Commercial Specialist in Guadalajara.


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Pop: 104 million

GDP per capita - US$ 6,500

Adjusted forPurchasing Power US$ 9,800 74 percent urban

Under 20 - 44 %

Wealthy - 5%

Upper Middle - 18%

Middle Class - 37%

Poor - 40%

Mexico A Snap Shot


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U.S. Trade with Mexico

Second largest U.S. trading partner

U.S. exports $120 bn to Mexico(54% in manufacturing).

Mexico exports $172 bn to the U.S.

Installed base of Foreign DirectInvestment: over $150 bn.

Mexicos Export Manufacturing(Maquiladoras):

Concentrated in NE Mexico.80% U.S. owned.Import $70 bn (60% from U.S.)56,000 suppliers in U.S.

67%

33%

U.S.

Mexicos Bilateral Trade


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Almost no tariffs on U.S. industrial exports to Mexico.

More than 90% of U.S. Goods enter duty-free.

By 2008, 100% will enter duty-free.

Institution ofDispute Resolution Process.

U.S.-Mexico bilateral trade increased 232%:

from $88 billion in 1993 to $292 billion in 2005.

The Impact of NAFTA


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Clearly not about cheap labor.

It is about integration of the North American marketplace.

It is about moving up the value-added chain. It is about maintaining and increasing competitiveness

and productivity.

Mexico, like the U.S., fears losing its manufacturing sector

to other countries why? Over the last 5 years: Chinas exports to the U.S. grew 300%.

Mexicos exports to the U.S. grew 30%.

The Future of NAFTAThe Future of NAFTA


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HighLow

High

Low

Labor intensity

Supply Chain Complexity Short lead times Product Bulkiness/

Transport complexity

AdvantageMexico

AdvantageUSA

AdvantageChina

Success stories(castings, fridges) Original

maquila model

Understanding Mexicos

Manufacturing Sweet Spot

Source: BCG2005


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Automotive Sector

Boomingin Mexico

Fastest growing manufacturing sector in Mexico.

Core part of North American strategy for most companies.

General drive towards southern US in automotive production. Even investments in US plants drive investment in Mexico:Toyota in San Antonio Bridgestone expansion in Monterrey.

Cost of labor is a big factor, but less than youd think.

Cutting costs lower scrap, save energy, increased automation.

Challenge: purchasing strategy local or at regional HQ?

Bottom line: if youre selling to this sector in the US, you shouldbe seriously exploring Mexico.


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Lookingat Overall

Production Figures

0

500

1,000

1,500

2,000

2,500

2004 2005 2006 Est. 2007

Export roduction

roduction for

Domestic Market

in thousands of units

Source: AMIA (Mexican Automotive Industry Association)


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Why This Mission?

4 Cities, 26-30 March

If youre in this business, you cant afford to pass up Mexico.

In one visit, you will cover 4 key cluster areas for assemblers and tier

1 and 2 suppliers. Our matchmaking services are at the core tailored for your business

needs.

As a group under the auspices of the US Embassy in Mexico, yougain visibility/credibility.

Results past users of our matchmaking services in Mexico have anexceptionally high rate of success in signing reps/securing exportsales.

Our metrics are yours: while there is a cost to the mission, we arejudged ultimately on whether or not we helped you export!


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What CanHelp You Sell Moreto

Mexican Manufacturers?

Good local representation.

Knowing where purchasing decisions are made.

Identification of your customers 1st or 2nd tier?

Assessment of customers as suppliers.

Finding out what your customers need.

Understanding what financial tools are at your disposal to offerfinancing.

Balancing risk of offering financial terms to your customers.

Following up!


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Conclusion What

now?

The US Commercial Service will help increase yourcompanys sales in Mexico, while providing a positive

and maximum Return On Invest for your participation

Next Steps:

Verify that your company is a good fit for the Trade Mission (discuss yourcompanys goals and objectives with our staff in Mexico)

Register with Kristian Richardson at 602.254.2907 (Sign Participation Agreement,Submit Payment, and Complete Gold Key Questionnaire)

Forward marketing materials to CS Monterrey and CS Guadalajara

Make flight and hotel arrangements as outlined in Itinerary


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APPENDIX


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Mission Statement

The U.S. Commercial Service is organizing an Automotive Industry Trade Mission focusedon Supply Chain opportunities in both northeastern (Monterrey & Saltillo) and central(Aguascalientes & Silao) Mexicos automotive clusters. This event offers a timely and cost-effective opportunity for U.S. firms to tap into fast-growing markets for automotive

equipment, technology and services.

Target sectors holding high potential for U.S exporters include process engineering design,sub-assembly, stampings, tool and die maintenance and fabrication, plastic componentparts, progressive stamping dies, cutting tools and lubricants, industrial safety equipment,process controls and testing equipment, and general industrial supplies. Missionparticipants will benefit from country briefings, one-on-one appointments with prospective

business contacts, andh

igh

-level meetings with

government officials and business leaders.

The participation fee is $4,900 per company. $330 for each additional company representative.

Website for registration and access to full Mission Statement:

http://www.buyusa.gov/auto/mexicomission.html


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Itinerary and Dates

25 30 March 2007

Day One (Sunday, March 25th)Arrive Monterrey / Hotel check-in / Evening organizational meetingNo Host Ice breaker meeting meet Monterrey staff and deliver Welcome Kits with agendas.

Day Two (Monday, March

26th

)8:00 AM: Meet Trade Aides and depart for meetings

9:00 AM to 5:30 PM: 4-5 meetings with potential partners or customers (translators and transportation provided).

7:30 PM to 9:30 PM: Cocktail reception with Commercial Consul, partners, and local government officials.

Day Three (Tuesday, March 27th)7:30 AM: Transportation via chartered bus to Saltillo. Travel time is approximately one hour.

8:30 to 9:30 AM: Business briefing with local industry representatives and government officials.

9:45 to 5:30 PM: 4-5 meetings with potential partners or customers (translators and transportation provided).

6:00 PM: Return to Monterrey via chartered bus.

No-host dinner in Monterrey.


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Itinerary,cont.

Day Four (Wednesday, March 28th)

8:30 AM: Commercial breakfast briefing with U.S. Commercial Consul, industry association, and industry specialists.

2:30 PM: Check out of hotel.

3:30 PM: Travel to Monterrey Airport for flight to Silao. (Mexicana de Aviacion at 6:15 pm)

7:30 PM: Arrive and Check-in to hotel in Silao (will be received by Guadalajara CS personnel).

8:30PM: Cocktail reception with Commercial Consul, partners, and local government officials.

Day Five (Thursday, March 29th)

8:00 AM: Business briefing and meet Trade Aides.

8:45 AM: Depart for meetings.


6:30 PM: Travel toAguascalientes by chartered bus (travel time approx 2 hrs). Check-in to hotel.


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Itinerary,cont.

Day Six (Friday, March 30th)

8:00 AM: Business briefing with local industry representatives and government officials.

9:00 AM: Meet Trade aides and depart for meetings.


No-host dinner and de-briefing meeting

Day Seven (Saturday, March 31st)

Return to the United States from Aguascalientes International Airport.

(Transportation not provided, unless all participants would leave at the same time)


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Mex Mission Presentation

Documents

Transcript of Mex Mission Presentation