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Serie documentos de trabajo
THE MEXICAN AUTOMOTIVE EXPORT GROWTH: FAVORABLE
FACTORS, OBSTACLES AND POLICY REQUIREMENTS
Alfonso Mercado and Taeko Taniura
DOCUMENTO DE TRABAJO
Núm. IX - 1990
1
THB MEXICAN AUTOMOTIVE EXPORT GROWTH: FAVORABLE FACTORS, OBSTACLES
AND POLICY REQUIREMENTS
Alfonso Mercado and Taeko Taniura
Centro de Estudios Econ6micos
El Colegio de Mexico
October, 1990
Introduction
The Mexican automotive industry is under a great technological
and economical transformation, and some aspects of this change have
been recently studied. 1/
In particular,
the new export-oriented
development is an important transformation. Automotive exports have
observed a sharp growth during the last 10 years.
This performance
is
expectation
and
requirements
are
studied
obstacles
identified.
in
are
this
paper.
examined
A survey was
and
The
firms'
specific
conducted at
export
policy
the
end of 1989
purposes. This survey included six vehicle producers
part manufacturers.
They e xported
the equivalent
to
for these
and 12 auto
72%
and 83%,
respectively, of the total exports in these branches. 2/
1 / See,
for instance,
K. Unger, 1990 and 1 987; A. Mercado, 1990;
J. Can'ill o,
199 0 ;
F. Za pata, T. Hos hino an d L. Hanor.o, 1990;
Booz-Allen & Hami lton Inc., 1937; H. sha~ken with S . Herzer,beL'g,
1987; C . Zarr.brano, 1937 ; t1, Bennet, 1986; M, Davila - Fl o res , U85;
and P. Jombois, 1:135.
Four Cilr assembler s an d two
trailer prodllcers (o ne of t h em is
producing also buses)
a re included. These firms exported 2059
million dollars in all, during 1988,' which represents 72% of total
exports made by automobile assemblers (according to Banco de Mexico
and INEGI).
Co n ~ ernlng the 12 surveyed auto p~rt firms,
they
exported in
total
near
390 million dollars
in 1988,
which
represents 83% of total exports of the main auto part exporters
listed by Expansi6n.
,
I
~,
•
2
1.
The Export Performance
The exports of vehicles and components increased from very low
amounts
in 1977
(12,000 vehicles
and 120 millions
of dollars
of
engines and auto parts) to almost 200,000 vehicles and 2.2 billions
of dollars of engines and auto parts in 1989. The export growth is
solid, after a period of highly unstable growth rate in the late
70s and most of the 80s. Firstly, the auto parts export observed a
big increment in 1977-1979;
then,
engine exports grew sharply at
the beginning of the 80s, and later, vehicles were the most dynamic
export. (see table 1 and fig. 1.)
Automotive
exports
manufactures export
represented 20%
Automotive
on average.
increasing
Vehicles,
of manufactures export
exports
Consequently,
are
have
the
grew
traditional
more
more
engines
in 1983
has
than
and auto parts
and 29%
dynamically
deficit
rapidly
than
been
in 1989.
imports.
eliminated,
resulting now a trade surplus with an export/import ratio of 1.8.
(See table 2.)
The complete
passenger
ca r
is
the ma in export product.
The
engine is also a major product . Trucks and buses are exported only
in very small amount.
•
3
FIGURE 1
Mexico's Automotive Exports 1977-1989
Ind ex
100
.'
80
Decree ana local cr isis
60
40
I
Decree
i
..
-.
"
..,._..
20
/
0
1977
78
~nnual
, .j -
.jJ
---'!
- 'J
1980
81
82
83
84
35
86
87
88
Grow th Rat. ('II)
400
300
200
r
I
100
- 100 '--- - ' 1978 ,9
'so
I ..Sou rce : Tabla 1.
:1
'.'enlcles
~3
-s- Engines
'3 5
-3 7
... ,. ';utO P.rts
I
'- -------------.1.
1989
4
Table 1
Automotive Exports by Product,
Motor Vehicles
1977 ~ 1989
Engines
Auto Parts
Years
Units
I
Millions
of
Dollars
GR
I
GR
Millions
of
Dollars
,
I
GR
1977
1978
1979
11743
2582 8
24756
6
13
13
119.9
- 4.2
82.5
86.2
50.1
6
6
4
4.5
- 41. 9
37.6
182.3
244.7
4
21
28
384.8
34.2
1980
1981
1982
1983
1984
18245
14428
15819
22456
33635
9
7
8
11
17
- 26.3
- 20.9
9.6
41.2
49.8
29.9
60.4
212.7
394.8
449.8
2
4
16
29
33
- 40.3
102 . 0
252.2
85.6
13 . 9
265.9
288.0
237.9
250.7
451. 0
31
34
28
29
52
8.7
17.7
- 7.7
5.4
79.9
1985 58423 30
1986 72429 37
1987 163073 83
1988 173147 88
1989 196999 100
73.7
24.0
125.1
6.2
13 . 8
1039.7
1152.7.
1290.9
1371.9
1366.3
76
84
94
100
100
131.1
10.9
12.0
6.3
- 0.4
434.3
570.1
655.1
658.7
859.6
51
66
76
77
100
- 3.7
31.3
14.9
0.5
30.5
I: Index; GR: Growth Rate (%).
Sources: a) Vebjc les. Period 1977 -84 : AMIA, 1986 (table VI-3);
period 1985-88: AMIA, 1989 and 1990. b) Eng; nes. Year 1977: SPP,
1981 (table .III.36 ); period 1978-84: AMIA, 1986, table XI-2;
period 1985-89: Comercio Exterior, several issues. c) Auto parts.
periods 1977 - 79 and 1986-89 : Comercio Exterior, several issues;
period 1980-85: INEGI , 1986.
Table 2
Mexico : Export of Vehicles, Engines and Auto Parts in 1989
Products
Share in
Manufactures
Export ( %)
Exports
(Mill ions
of dollars )
12. 0
10.5
6.6
1 567
1 366
860
10.0
8.0
0.5
. 29 .1
3 793
1.8
Vehicles
Engines
Auto parts
Total
Source:
.c.o.~io
~terior,
BANCOMEXT, June .
1990,
Export / Import
Ratio
"Sumario Estadistico",
•
5
Mexican production of cars started
assembly of
imported
national manufacture
CKD
in thE' thirties with
("completely
of auto
parts
knocked
was
down"
initiated
kits).
in
the
the
The
1940s,
under an imports substituting policy. Exports started slowly in the
sixties,
grown
but expanded
rapidly,
vehicles and
sharply
specially
in
just
the
in the
late
1980s.
1980s.
Exports
Nearly
200
have
000
140 000 engines were exported in 1989. Also the firms
export margin as to
total sales increased from around 0 .20 (except
for GM which export margin was 0.53 in 1985) to around 0.50 (except
for Nissan,
which export margin decreased from 0.20 to 0.03,
consequence of
its growing domestic sales).
had a high export margin,
sales,
of engines
lower
margins.
export
exported a
30% to
40% of
total
and 51%
Nissan
lower margin
GM and Ford
more than 50%. GM exported 59% of total
and particularly exported
exported 100%
'In 1988,
as a
of vehicles.
exported
in 1988.
sales,
80% of engines production.
18%
Nissan
of
total
Ford
and VW had
sales.
VW
But in 1989 it exported between
including
complete
car ~
engines
a nd
spare parts (complete car had an export margin of 40%).
The bigger exporters (particularly the producers of passenger
cars) have reached surplus
in their foreign trade balance,
dur ing
the second part of the 80's, resulting with an export / import rati o
quite higher than 1, ranging from 1.7 to almost 3.
Assembling firms
export mainly
to the
US, Chile
and Cana da .
Exports have been highly and increasingly c o ncentrated in these
countries, ' absorbing
92% o f
the Mexican
expol·ts
of
vehicles
3
in
1987, and 94% in 1989 . But the main client by far is the US, whi ch
6
received 83% of exported vehicles in 1989. Firms sell also to Latin
America and Japan. Mexico is exporting auto parts heavily to the
u~
market, although some exports go to France, canada, Taiwan, Spain,
India and some south American countries.
2.
Fayorable Factors
Exports of vehicles have grown as a result of the combination
o,f the export promotion sectorial policy,
the TNCs
restructurinq
strategy and the domestic market chanqes. Auto part exports started'
as
a
consequence
of
local
demand
contraction
in 1982-1985.
The ~
growth rate of these exports was particularly high those years.
The
domestic
stimulating
recession
exports,
combined
was
specially
the
new
with
TNCs
global
changes in product mix and government intervention,
decree. However,
so important
in 1989-1990,
to increase
other
factors
strategy,
li ke the
1983
the role o f domestic demand is n o t
exports.
Both
fOl-eign demand
and local
production are increasing, stimulating exports .
a
Decrees with an Export Qri ent e d
Strate~
The automobile sectori al policy implemented with decrees is a
major factor explaining the dynamic export performance.
Vehicle exports were
middle of
the seventies,
less than 10, 000 uni ts per ye ar by the
but after
the 1977 decree,
there was a n
7
important increment (from 11,700 to 25,800 units in 1977 and 1978) .
This
change
was
c oncentrated
in
augmented three times its exports,
to about 18,000 units
in 1978 .
engine exports to increase,
plants
for
export .
In
exports, and latter,
in big amount.
Volkswagen
(VW)
exports.
VW
from around 5,000 units in 1977
The 1977 automobile decree forced
too. Firms decided to invest in engine
1982
GM and
Chrysler began heavy
engine
in 1984, Ford, VW "and Nissan began to export
In 1985 Renault started to export heavily too, from
a new plant . The sectorial public policy and changes in TNCs world
strategies caused big changes in engines exports, specially in 1982
and 1985, when these exports grew from 60 'million dollars
million dollars in 1981-1982 I
to 213
and from 450 million dollars to 1040
••
million dollars in 1984 - 1985. (See figure 1 and table 1.)
The decree
in 1983
production efficiency
was
explicitly designed
and more
deficit . The local demand
exports
so
to
to
induce
eliminate
for vehicles collapsed,
a
more
trade
as a result
the Mexican external debt crisis and a generalized recession.
of
The
local content requirement was reduced to a minimum 30%, if 80% of
production were exported. If 56% of production were exported, local
content should be 56%. This reduction in local
content
became
a
stimulus to export .
In 1984,
export.
Chrysler,
Latter,
in
automobile exports
GM and Nissan
1987,
were:
Ford
Ford
Nissan 10.9%, Dina and VW 0 . 6% .
being
83%
its
share
in
total
s tarted
ini liated
38.3%,
to increase
exports .
Chrysler,
The
29 . 1%,
their
share " i n
GM 21.1 %,
In 1983 VW was the main exporter,
automobile
exports .
This
share
8
declined to 45% in 1984, because other companies increased their
exports. In 1985 VW reduced strongly its export and this low level.
continued for years.
The
export.
1983
The·
decree
de c ree
pushed
tried
local
to
producers
eliminate
introduced liberalization measures,
a
of
auto
trade
parts
deficit
to
and
by reducing the local content
requirement for high exporters . This induced a local demand decline
for local components, which was already low because of the general
recession.
export.
Under
They faced
domestic market
some
these
conditions,
a strong competition
share.
advantages
the Mexican producers
of
and a
decline
had to
in their
But those which succeeded exporting took
the
liberalization
procurement of raw materials,
process,
like
easier
as well as easier and cheaper import ·
of technologies and machinery.
In part because of this,
they could
be more competi t :i ve in foreign markets . .'J/
The new deccee, published in December 1989, provides new rules
for producing vehicles and components. It brings a complete freedom
to firms
are
to produce
allowed
surplus.
to
The
mlnimum
Previously,
th "..
(exporting
80 % ':' r
integration.
any number of product lines and models.
import
1983
Th ,'~e
trade deficit.
ti 0W
more
new
value
vehicles
according
added
now
decree
of the
changes
••
are
is
allowed
only
production)
under
30%
the
the
They
to
their
trade
for
every
firm.
high
to have
condition
exporters .
so low local
of avqiding
there is no special stimulus to export in terms
.'J/ M. Bennet, : . 36, and Booz-Allen & Hamilton Inc., 1987, agree on
the importanc e of government intervention. K. Unger is more
skeptical, but ;' ~cognizes an influence of the 1983 decree on the
auto parts expo,',::.
9
of
lower
producers
local
may
content
easily
requirement
change
for high
from
exporters.
exporting
to
Vehicle
supplying
the
domestic market, depending on markets situation. The decree implies
a liberali~ation of the traditionally protected local market ~
the point of view of the firms,
liberali~ation
From
will help them for
an easier procurement of raw materials and equipment (with higher
quality and cheaper price) . They expect their competitiveness will
improve.
h
The jmportance of TNCs glohal
strategies
All passenger car firms . are·lOO% foreign owned by TNCs. There
are 100% national private and joint-venture firms amonq producers
of trailers . Only one car producer is trying to export not only to~
other
firms
in the
same
TNC,
but also
to
independent
clients,.
However, the main channel is precisely the same TNC .
The strategy and contacts of the TNC is considered the most
important factor
to export,
quali ty requirements,
after
fulfilling
according to the firms
the price
managers.
and the
The local
subsidiaries have access to foreign technology in the same TNC and
they pay
for
technical
assistance.
They
take
advantage
of
the
world-wide sales network and generally take a low price to export
inside the TNC.
Moreover,
western
TNCs
Mexican
exports
strategies
were
during
the
favored
by
1980s .
substantially restructure their world production,
the
They
change
of
decided
to
as a response to
10
and selected Mexico as an export base . J/
the Japanese challenge,
Investment in Mexican plants was oriented to reduce global costs,
to i ncorporate Japanese ideas on work organization and automation,
and
us .
to
take
advantage
of the close geographical location to the '
~I
Since almost
organization,
all these
the
price
exports
policy
of
are realized inside
local
subsidiaries
markedly from that of independent producers.
between
export
and
domestic
- produced by subsidiaries by
independent
firms.
taxes in Mexico,
market
is
That
in passenger cars
trailers
big price difference
determining
differs
The price difference
big
but almost null in
the TNC
is due
a high domestic price.
-produced
to high
At the same
•,
time, tax saving in exports and big orders of export to the same ,
me
(transfer price,
low profits)
give as a result a lower export
price. Two out of three car producers expect this price difference
will tend to reduce because of the new liberalization policy,
But
the other firm stated that the difference will continue if the high
domestic taxes remain.
The auto parts exporters have various types of ownership. Most
of them
are
j oint-venture
firms.
In this
sample,
there
are six
joint-ventures, four 100% national and two 100% foreign firms . The
main e x porter
is a
foreign
firm;
the second main
e xporter
is a
joint- venture, and , the third main exporter is national owned,
The "
JI This strategy change took place in what western executives used
to refer as the "after Japan"
Herzenberg, 1987 (page 45) .
~I ~.
period,
See also A. Mercado, 1990,
See
H.
Shaiken wi th
S.
II
share of TNCs in the ownership of auto part firms
or less)
most
(~ither
in 100%
favor the export. The linkage with TNCs is considered the
important
executives,
favorable
after
requirements.
factor
satisfying
Automotive
TNCs
to
the
US I
making Mexico one of their supply base,
higher quality standards,
by
quality,
the
in
export
the
interviewed
price
Canada
and
time
and Europe
are
requirinq components with
low production costs
and quick delivery
time.
C
Changes
Two
in
the QomestiC Market
important
export
changes
historical market transformations.
have
' been
associated
From 1979 to 1982,
to
the domestic
demand grew strongly, because of the oil boom in Mexico,
and this
caused a decline in the automobile exports. Years later,
in 1983,
the
domestic
demand
collapsed
crisis. As
a resul t
the
producers " decided
local
exports.
of this,
More recently,
Ii.!
and
the
industry
entered
in
in combination with the 1983 decree,
to
increase
systematically
the local demand is recovering,
their
but firms
are exporting as a response mainly to a growing foreign demand (an d
to expansions of their production capacities).
Market changes have been particularly decisive f o r the export
o"f auto parts . Most o f
1982,
the
beginning
increasingly exporting
the main exporters started t o export a f t!?,.
of
the
sinc~
recession
in
Mexico
ar: d
have
bee n
then. Those components exported bef ore
fI./ This was cor:sc.:i,"red the b i gg-?st ,-::e,·,·'ll1d
Booz - Allen ~ Ham i lt on Inc., 1987, and A.
fall in
M~ rcado ,
the "'Io rld .
19 00.
.>
-"
12
1982 were old technology based,
like brake parts,
leaf springs and
chassis. Exports of engines and engine components started in 1984. ,
They
started
to
export
mostly
because
of
market
reasons,
rel,ated to the decline of the domestic demand and catching market
opportunities in the us and South America.
However,
to export,
a contracted local demand is not any more the reason
but the higher foreign demand. This change was observed
by interviewed executives.
The recent increasing trends in imports
and exports confirm that the local demand has recuperated at a high
rate and, at the same time,
the
auto
parts
import
exports are increasing.
grew
in
200%
and
export
In 1986-1989,
grew
in
50%,
according to the f.omercjo Exterior data.
d. Productivity and Capa;ity Utilization
Big productivity
differences would
differences
not
be
so
are
found
big taking
among
into
firms.
account
These
different
product-mix across producers. But the evidence gives an approximate
picture.
Differences
in
productivity
differences in scale and technology.
may
be
explained
by
It is observed that the firm
with the highest productivity reaches the highest amount of export .
So this suggests that heavy exports are based on high productiv i ty
levels.
Assembling plants oriented to export have the highest rate o E'
capacity utilization,
whereas
assembling
domestic market observe lower rate.
had an increasing usage
plants
oriented
to
the
The Eirst type of plants hav e
rate in 1985-1999,
but other (few)
of the
13
second type have had a declining rate. Heavy investment was carried
out in the first years of the 1980s and in 1988 - 1989.
consisted
in
modernizing
facilities
by
Investment
introducing
flexible
automation (computer aided manufacturing).
e
Export promotion pol;cies
Fav o rable General
The general export promotion policy (EPP), consistinq of a set
of fiscal,
financial and direct-promotion instruments to encourage
Mexican exports,
important
if
decrees and
According to
it
is favorable to automotive firms,
is
compared
the international
with
the
impact
of
but is not very
the
sectorial
restructuring decided by the TNCs .
the main exporters,
the most helpful
EPP instrument
has been the temporary import programs for exporters (PITEX), which
is fiscal saving of tariffs.
If PITEX has been the most important fiscal incentive used by
these firms,
is
the
income
the second one is the "draw-back",
deduction
of
expenses
abroad
( in
and the third one
promoting
sales)
from
t ax.
credit supported by BANCOMEXT is the most important financial
instrument. However
this importance
is low
if it
is c ompared
to
PITEX .
The executives o f auto-parts firms co nsidered that
been
a
lack
of
favorable
tariff
agreements
between
there ha s
government s
concerning components. Despite these e x port policy instruments play
a secondary for the growth of exports, according to the firms point
of view, they give a favorable influence on the price.
14
Table 3
Utilization of the Most Important Export Promotion Policy
Instruments , 1989 ~/
Instrume n t
Auto Parts
PITEX
Export Cred.1.t
Drawback
VAT Reimbur5ement
Other instruments
~/
Motor Vehicles
YES
YES
NO
YES
NO
YES
YES
YES
NO
NO
YES means very important. NO means not very important.
f. The Product t·ri x in the Auto Parts Industry
Engine components and engines
the most import "" t
range
of
are
exported,
reinforcements, gears,' axles,
and
engines,
products.
like
leaf
springs,
chassis,
transmissions, wheels, shafts, brake
(see table 4.) Except for some engine components
these
They
are
auto parts exported from Mexico . But also a big
compon~nts
parts and bodies .
(both gasoline and diesel)
auto
parts
o\ re exported
are
based
conventional,
on
l o cal
old-technology
advantages ' of cheap
labour and cheap raw material. only there are few e xceptional case s
of
based
new-technol o ~ y
products
as
the
e ngines
assembled
by
Renault (with h : qh automation and a lot of imported parts), and the
engine parts
As to
ma '~0
by CIFUNSA and NEMAK.
old- ~ ~c hnology
auto parts, dir ec t
export i s bigger thao _
indirect expor t . But as t o new-technology compooents, the situati o n
is
the opposice .
This means
tha t
foreign market
direct
export
up to now,
~ han
is
smaller
than
indirect export .
conventiooal components have
the i ndirect channel
a bigger
to e xport through l ocal
15
c lients, whereas the new aut o parts have a s maller mark et abroad as
compared wi th
the domest ic
seem
reached
to
have
a
mar ket.
Some
c onventional
c ompetitiveness
on
the
auto
basis
of
pa rts
the
e mpl oyment of ch eap labo ur and the use of fixe d te chno l o gie s . ' 1 1
Table 4
Main Aut o part Expo rts in Mexico , 1981 -1 988
(M i llion dollars)
Spare
Auto
PartsJlI
Year
198 1
19 8 2
19 8 3
1 98 4
19 8 5
1986
1987
1988
165
131
180
27 0
241
374
444
454
397
1988.PI
Leaf.!:: I
spring
Engine
components111
22
27.
41
47
50
81
98
98
108
To tal o f
selected
aut o parts
20 5
1 87
255
364
339
4 66
588
60 1
55 8
18
29
34
47
48
11
46
49
53
~ / "Par t e s s u eltas para autom6viles" .
111 " Partes 0 pie z a s para motores" .
.el "Mue l l e s y su s hojas para aut om6viles " .
p i Pre li minary d ata .
Sourc e ; Comer cio Ex ter io r, " Sumari o Es t adisti c o , " s everal issues.
g . s iz e and Cap acity Util ' :: ath n in t he dJ.\t Q Pa rt s Indu st ry
Export er s ha ve been lnves ting, increa s ing t hei r p l an t s iz e and
improving the produ c t qu a l i ty.
operating
in
a
high
~ apacity
The y hav e
us age ,
[~ a c he d
a nd
sca l e e co nomi es ,
p r odu c i ng
at
c heaper
1 1 K. Unge r , 198 7 , ,o ;.: p La : n" cos t adv a n t .l<;-=., c f c:>l1ve nt i ona l aut ')
pa rt s a nd c r-i tici::e s · firms ;J assl v i t y [ -:ga 1- j ing !l ew a,l t o pal-t s.
Bo oz - Al le n " Hamilt on Inc., 19-37 , QbS e l-Ve ad v ant a ge s f " r- l oca l a u t l)
par-t:s ma de o f a l um illlLl;n nc c oo per- .
16
production c o sts.
The size of exporting plants is diversified.
For
instance, a sma ll engine plant has a production c apacity of 5,000 .
units / year and anot h er one has a capacity of 800,000 engines/year.
Regardin g
the
manufacture
of
heads,
one
plant
has
a
capacity o f
14,00 0 heads/year,
heads/year.
The big export volumes
are conr.entrated in the large
and medium
size plants
5),
(see
while another one has
installed
table
2.5 million
usually utilizing
a high
proportion of installed capacity.
Some of them produce
small lots
of components,
the domestic market.
Except
but these
one small exporter,
expansions
in
are for
all exporters interviewed invested heavily in
1988-1989 .
Most
of
them
have
been
increasingly
utilizing their installed capacity.
Table 5
Export Performance of 11 Auto Parts Producers by Size, 1988
Size (labor)
Firms Export Performance
A.
~lU;!Ql:t
50
49
1
B.
-
100
20
19
maI:9in
(:J;
100 to
1 000
l ill
1
2
a
l/: all.1e
(l:l111iQD pes~
3 - 30
31 - 100
101 - 400
1 001 to
5 000
5 001 to
15 000
4
1
a
a
2
1
3
2
2
a
a
Elj;~QI:t
~/
Export
for
2
1
a
to total sales.
1
17
h. Local Adyantages in wages a nd tabor in the Terminal In..d.llil.L:.:l
The terminal
firms
reported
a
low wage
proportion
to
total
cost, as between 10% to 13% in 1988. This is a relatively low rate,
if it is compared with local auto part firms, where the proportion
was between 7% and 23% . The trend in job opportunities is upwards,
increasing gradually from 1985 to 1988.
3. Obstacles (Firms Point of View)
The main
obstacles
for
these
exports
refer particularly
to.
inefficiencies of the domestic inputs industry, the product quality
and the local infrastructure facilities. The interviewed executives
in
the
terminal
firms
pOinted
out
the
following
obstacles
importance order):
i )
Input problems ( high price, lower quality, bad
delivery time).
ii)
Transport deficiencies, specially by land, to the
ports.
iii) strict requirements in quality standards, and
offi c ial pri c es i n other c ountries.
iv)
Product quality.
v)
High import tariffs in
vi)
Delivery time .
oth~r
c ountries.
( in
18
The local expor t ers
number
one
the
of
nat ional
auto parts
i n puts
iden t ify a s t heir prob le m
.i ndustry
too ,
in
t erms
of
high'
prices , l ow quality and s hortage . A second obstacle is referred to
pressures
on
associated
product
directly
price
to
and
c osts,
quality.
A third
delivery
diff icul ty
time
and
is
quality
requirements abroad . The fi r st two elements are affected mainly by
the local inputs supply.
other problem
the protection abroad (tarif fs
government support
firms).
Some
c onstraints
c ompanies
to
technological
auto
to
that
part
c atch
as well as a lack o f
( this
there
were
exports.
up
according
the
o ther
to
two
important
These
refer
to
rapid
innovation
bad domest i c infrastruc ture i n communi c ation and
instability
low man a gement
new e xporters
difficulties
pri c es and tr ade),
and licences)
s tated
Mexican
oc curring abroad,
transport ,
t o t he
- but not so important- is
in
e conomic
pol i c y
( regarding
decrees, '
bad reput a t ion of Mexic an man u factures abro ad,
s kills,
l anguage
b arr iers
a nd
pro t ec t i on
in
bi g
fore i gn markets o f mili tary ve h icles and e quipme n t due t o security
r easons ,
The main obstac l e s ref e r
to d omes tic factors , Fo r e i gn f acto r s
a re not considered a s ve ry i mp o rtan t
2) ,
ob stacle s
(tabl e
6 a nd f i g,
19
Ta,ble
6
Main Obstacles to Automotive Exports, 1989
Obstacles
Inputs (scarcity, price,
quality)
"Other's"
Taxes abroad ( tariff)
Costs
Price
Prote c tion abroad
( li :.: ensing)
High auality requirements
Delivery time
Quality (own)
Lack o f government
support
.
Auto
Parts
Motor
Vehicles
100
45 b /
55
55
74
60
100 s;/
53
27
27
45
52
55
71
27
67
47
53
13
27
~/ Every firm gave several answers, ordered by importance. The
most _ impor t dnt answer had 10 points, the second important
answer had 8 , and so on. The resulting figures were indexed.
b/ Three firm s o ut of twelve stressed a bad infrastructure to
export
fr e ,'l Mexico
(transport
and
c ommunication),
bad
reputation
of
Mexican
auto
parts
and
technological
constraints to follow rapid innovation.
(O ~lt o f six) referred to the c riti c al political
and econom i :~ situation in Latin America ( which co uld be a
major expo r~ market) , transport i nfrastru c ture inefficiency,
and labor Ul: ion problems in ports .
>:./ Three firm ,.
•
20
FIGURE 2
Obstacles to Ex port
Input s
Others
Price
Quali t y Required
Own Qualit y
Ta r if fs
Timi ng
COS t S
licenCing
Lack Gov SU PPor t
I)
40
20
60
60
Wei ght80 Answers
g
Sour ce: Su r vey
Auto Parts
o
Ve rllCles
100
I
120
21
4.
Most of
Export Expectatipn by Firms (1990-1992)
the exporting
firms
perceive
a positive climate
to
export. Executives state that there are more favorable factors now
than
before
and
that
there
are
more
positive
conditions
than
obstacles for export . This perception is consistent with the export
performance
these
firms
had.
They expect growing exports,
Consequently,
they
are optimistic.
mainly for reasons related
to trends
in foreign demand for their components. Only few are more cautious,
expecting
constant
a
constant
foreign
level
demand
(on
in
their
account
exports
of
the
due
excess
capacity in the US auto industry, the main market),
to an expected growing domestic market.
to
of
expected
installed
in combination'
(Table 7 and fig. 3.)
Table 7
Firms Perception about Exp~rts Cli mate
(Answers Index a /)
Perception
Improving climate III
worse climate s;1
Optimistic Expectati on >11
Prudent Expectation .dl
~I
Auto
Parts
Motor
Vehicles
10 0
10
100
100
33
100
20
33
The index base (100) corresponds to the most fr - quent answer
in each industrial branch.
121 This refers to eithe~ more f avorable factors now than befor e
or more favorable factors than ob stacles.
s:.1 This refers to either less favorable factors now than before
or more obstacles than favorable factors .
dl This refers to the period 1990-1992. optimisti c exe cutives
expect a growing export.
Prudent executives expect
a
constant export.
22
FIGURE 3
Export Climate Perceived by Firms
and Expectatives
Weighted An$wers
120
lOa
80
60
40
20
o
Auto Par IS
Ve h icles
_
Improvi ng Climato
D
OClimlSlic E )(Oeci8 t
_
Worsening C l lma!!:)
_
Prud ent Ex DeC l e! IVeS
So urce ; Sur \jey
23
5.
Government policy
has changed over time.
Policy Requirements
has
induced automotive
At early eighties,
exports.
This
role
government pushed local
producers to export by a decree in 1983.
But from 1985 on,
has been a more elaborated export promotion policy.
Host
there
of the
auto part exporters have taken advantage of import tariff savings
(PITEX) and preferential export credits (BANCOMEXT), particularly.
The 1989 decree brings some trade liberalization and continues with
the export promotion.
What policy modifications
are to be suggested to consolidate
the Mexican export capability?
Taking as a starting point the so
good
export
performance,
government policy,
stimulated
by
transformations
in
in TNCs strategies and in specific markets,
it
is pertinent to explore policy answers in three directions :
j)
Th e
·~ ey e '1
include
not
complete,
exports .
o pme nt
o nly
of
an
fis c al
well-organized
For
example,
radically improved.
required too.
the
Ax p o r t
and
p ro IDot i Qo
financial
i nstruments,
infrastructure
transport
s y ste m.
to
and
This
has
but
also
efficiently
system
a
support
to
be
Faster c ust om clearance o f imp o rted inputs
is
The c ust om pro cedure migh t
s tore
to
is
re al i ze at the plant,
as
is already done in ver y few cases.
jjl
Tr ade
efforts
to
libera li;; ati o n .
improve
Trade
efficiency
liberalization
and
quality,
generated a higher competitiveness abroad.
has induced l oc a l
which
in
turn
has
The 1989 decree brings
24
some
liberalizat'.on,
but this
could
be
extended.
The
limits
to
liberalization al: e the need of reciprocity in other countries where
Mexico is trading.
jii)
Towards
supply of
a .. more
input s
is
iompetitiye
stressed by the
major problem which limits
strong
fight
in
the
i npllts
world
industry.
automotive
market
makes
national
executives
their export capability.
auto
The
more
as
a
The on-going
necessary
to
induce big impro v ements in the local industry of basic inputs, like
steel, aluminium , cooper and synthetic materials.
25
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1
SERlE DOCUMENTOS DE TRABAJO
The following working papers from recent years are still
available upon request from;
Rocio Contreras,
centro de Documentacion, Centro de Estudios Economicos,
E1 Colegio de Mexico, A.C., camino al Ajusco #20, C.P. 01000
Mexico, D.F.
85/1
Bhaduri, Amit. "The race in arms; its
mathematical commonsense".
85/11
Garber, Peter M. and Vittorio U. Grilli.
"The belmont Morgan syndicate as an
optimal investment banking contract".
85/111
Ros, Jaime. "Trade, growth and the
pattern of specialization".
85/IV
Nadal, Alejandro. "El sistema de precios
de produccion y la teoria clasica del
mercado" .
85 / V
Alberro, Jose Luis. "Values a nd prices
in joint production: dis coveri ng inn erproductivities" .
8 5/VI
Urquij 0 Hernandez, Luis Al fredo de. "Las
placticas de ajuste en el sector externo;
analisis de un modele computable de
equilibrio general para la economia
mexicana",
8S/VII
Castaneda Sabido, Ale jandro 1. "La
propos icion de i nefectividad de la nueva
macroeconomla clasica un estudi o c ritico".
8S/VIII
'
Alba, Enrique d e y Ricardo samaniego,
"Estimacl on de la demand~ de gasolinas y
diesel y e1 impacto de sus precios sobre
los ingresos del s ectol- publi co ".
2
8S/IX
Alba, Enrique de y Yolanda Mendoza"Disaggregation
and forecasting: A bayesian analysis"
86/1
Blanco, Herminio. "The term structure of
the futures exchange rates for a fixed
exchange rate system: the mexican case".
86/II
Ize, Alain and G. Ortiz."Fiscal
rigidities, public debt and capital
flight".
86/III
Alberro, Jos~. "La dinimica de los precios
relativos en un ambiente inflacionario".
86/IV
Bucay, Nisso . "wage rigidity and the firm
alternative approaches".
86/V
Alberro, Jos6 y Jorge cambiaso."Caracteristicas
del ajuste de la economia mexicana.
87/1
Alberro, Jos~, Jos~ C6rdoba and Eytan Sheshinsky
"On measures of dispersion of relative prices
under inflation".
87/II
Alberro, Jos6, Herminio Blanco and Peter
Garber "The effects of terminating the
mexican two-tiered exchange rate system".
87/III
Fernandez, Oscar y Nora Lustig.
"Estrategias de crecimiento, sustituci6n
de importaciones y balanza de pagos en un
modele de crecimiento multisectorial".
87 / IV
Tornell, Aaron. "Insulating properties o f
dual exchange rates : a new-classical
model" .
87/V
Villarreal, Roberto."EI manejo de la deuda
externa de M6xico en la d6cada 1978-1987"
87/VI
Mercado, Alfonso. "Automatizaci6n asistida
par computadora y desarrollo industrial en
Mexico.
El usa de las maquinasherramienta de control numerico
computarizado".
87/VII
Garcia Alba, Pascual. "Un enfoque para
medir la concentraci6n industrial y su
aplicaci6n al caso de Mexico".
••
3
87/VIII
Villarreal, Robert I. "Investment and
financing interactions at the firm's
lev 8 ~: an econometric simultaneous
equation approach".
87/IX
Lustlg, Nora. "M~xico: size and impact of
non transfer expenditures: 1920-1985" .
87/X
-Lust : g, Nora. "Del estructuralismo al
neoe s tructuralismo: la busqueda de un
paradigma heterodoxo"
88/1
Guer r ero, Victor M. "Obtenci6n de
pron6sticos 6ptimos, sujetos a
rest r icciones, con modelos arima".
88/11
Lust~g, Nora.
"Stabilization and adjustment
in post 1982,Mexico:are there signs of
expert-led growth?
88/111
Yunez, Antonio. "Theories of the exploited
pea~antry; a critical review".
88/IV
UngE~,
88/V
Gar~ia Rocha, Adalberto, Aurora G6mez y
Miguel Szequely. "Estrutura de la
desigualdad en M~xico".
S8/VI
Hart, Michael. "Dispute settlement and the
Canada- united states free trade
agr e.: ment" .
88/VII
Per ez Motta, Eduardo, Evelyn Greenwell y
Gabr1ela Quezada . "participaci6n de la
muj ~ r casada en e1 mercado labora1 del Area
urb ~n a en Mexico: un anA1isis econ6mico de
su r e laci6n con la divisi6n sexual del
tra nijo dentro de la estructura fa miliar".
88/VIII
Ba l ~ let, Alvaro. "An anal/sis of direct
ta:;.) ': ion o n mexican taxpayer s; a
mi cr~ simulations approach"
88/IX
Bai: . ~e t,
Kurt y Luz C. Saldafia, "Las economias
de e sc ala y de alcance en las exportaciones
mex ~~ anas mAs dinAmicas".
Alvaro y Arlette Cisneros. "La
iO";,,:si6n extranjera directa e n e l sector
de
~ I~rv icios
en
M~xico".
•,
4
88/X
Baillet, Alvaro. "La evolucion de los
ingresos del sector pUblico".
8S/XI
Kehoe, Timothy. "A general equilibrium
analysis of the indirect tax reform in
Spain" .
88/XII
F~rnadez,
88/XIII
FernAndez, Oscar . "Valores y precios en
produccion anAlisis de comportamientos
destructivos ocultos".
89/1
Unger, Kurt and Luz Saldana. "MNC, global
strategies and technical change:
implications for industrializing countries"
89/II
Cuddington, John and .Carlos urzua.
"Primary commodity prices: a time-series
analysis of trends and cycles".
89/III
urzQa, Carlos M. "Tests for multivariate
normality of observations and residuals".
S9/IV
Crane, Randall. "Tax-price specification
and the demand for local public goods".
89/V
Crane, Randall. "A note on hedonic prices
in cost/ benefit analysis".
90/1
Ize, Alain. "Trade liberalization,
s tabilization, and growth: some notes on
t he mexican experience".
gO/II
Sandoval Musi, Alfredo "Constru c ti on o f
new monetary aggregates: the cas e of
Mexico".
90/III
FernAndez, oscar . " Algunas notas sobre
los modelos de Kalecki del ciclo
economico" .
90/IV
sobarzo, Horacio E. "A consolidated social
accounting matrix f o r input- o utput an alysis" .
90/V
Urzu a, Carlos M. " El d~ficit del secto r publico y
la politica fiscal e n Mexico, 1980 - 1989.
gO/VI
Romero, Jose "Desarrollos recientes en la teoria
eco nomi ca de la union aduanera".
Oscar and Nora Lustig. "Optimal
allocation of investment and the role of
import substitution".
•,
,
5
90/VII
Garcia Rocha, Adalberto. "Note on mexican
economic development and income distribution".
gO/VIII
Garcia Rocha, Adalberto. "Distributive effects of
financial policies in Mexico".
90/IX
Mercado, Alfonso and Taeko Taniura "The mexican
automotive export growth: favorable factors,
obstacles and policy requirements".
•