GlobalAutoTV
Click to watch Wim van Acker -
Click to watch Wim van Acker -
latin resources

Need an office in Mexico or Brazil? Office suites, meeting rooms, virtual offices, network access



free downloads
LATIN AMERICA: "Competitive Brazil: Challenges and strategies for the manufacturing industry" report

LATIN AMERICA: "Competitive Brazil: Challenges and strategies for the manufacturing industry" report. 104-page report by Deloitte.

proceed to download
eJournals




back to index backLATINtalk October,  2015


Foreign investors are choosing Mexico over Brazil

According to the Off Shore Group, one of the largest shelter service providers in the country, who offer everything from real estate to human resource management; Mexico and Brazil were listed among the top 20 host economies for foreign direct investment in the United Nations 2015 World Investment Report.

Additionally, the report listed Chile and Colombia as the only other Latin American countries attracting a high level of foreign investment. Many businesses will look to foreign investment when considering the offshoring advantages of different locations throughout North America, and while Brazil has historically led the way in economic health, FDI has declined in recent years.

The Financial Times cited an fDi Markets report that found Mexico attracted 366 greenfield investment projects totaling an estimated $33 billion in 2014, compared to only 322 investment projects in Brazil totaling $18 billion. While the two countries certainly dominate foreign investment in the region, investors are ultimately choosing Mexico to start new projects, build new facilities and create long-term jobs for the country’s citizens.

Brazil’s economy on the decline

One of the primary reasons investors are choosing Mexico over Brazil is the steady decline in Brazil’s economy. Since 2010, economic growth has diminished in the country, and Pew Research reported public assessment of the country’s economic health has fallen by 27 percentage points between 2013 and 2014. Today, only 13 percent of constituents surveyed by Pew Research said economic conditions were good in the country.

Manufacturing and labor costs in Mexico make the country more appealing to investors.

On the contrary, Mexico’s economy has continued to grow, largely due to its booming manufacturing sector. In fact, the fDi Benchmark data also revealed that total operating costs for an automotive manufacturing plant in Mexico are $2 million less than in Brazil, and labor costs are similarly lower. Mexico’s thriving manufacturing climate appeals to FDI and will contribute to the country’s long-term economic growth.

Mexico’s access to high-demand markets

Mexico’s close proximity to the U.S., as well as its participation in NAFTA, serve as assurances that investment in the country will be lucrative. Open trade with the U.S. gives investors from Asia and Europe the opportunity to streamline their supply chains and leverage lower export costs. Additionally, manufacturing in Mexico, among other industries, benefits from the speed to market the country provides due to its location. Brazil, on the other hand, lacks the benefit of proximity and had far fewer free trade agreements to offer foreign investors.

Political corruption


Political corruption is another important factor that influences investor confidence. Brazil’s current state of political corruption, particularly Operation Car Wash – a scandal in which the country’s state-controlled oil company used a car wash location as a money-laundering site – has had a negative impact on the perceptions from foreign investors. As noted by the New York Law Journal, Operation Car Wash has threatened to tip Brazil into a recession.

While Mexico certainly has its fair share of corruption issues, increased foreign investment and the trend of manufacturers expanding to Mexico have sparked a diligent anti-corruption movement in the country. In an interview with The Wall Street Journal, Fernando Cevallos, leader of Control Risks’ compliance, intelligence, investigations and technology team for Mexico, explained that the country’s new anti-corruption bill would create greater transparency and ease the concerns of potential investors to the country.

Source: The Yucatan Times - GAI





previous page

go top
search our site


Loading

LATINtalk

Other articles from the same issue (October,  2015).

Growth In Mexican Auto Industry Creates Opportunities, Challenges For U.S. Suppliers
play read on

Canada, Mexico share concerns about TPP impact to auto industry
play read on

Carmakers in crisis-ridden Brazil are looking for the way out
play read on

Growth in Mexican automotive production is impressive in first half of 2015
play read on

Auto: Brazil Declines Worsen in September (2015) report
play read on

Truck: Brazil Market Sees Significant Declines Continue in Q3 2016 report
play read on

Automakers Driving to Mexico
play read on

Latin America may be down now, but it's not out
play read on

Latin America's 2013/15 exports, worst performance in eight decades says ECLAC
play read on

Is Turnover Mexico’s Formidable Foe?
play read on

Why Latin America’s multinationals are struggling to go global
play read on

Mexico: New Requirements for Corporation Publications
play read on

Foreign investors are choosing Mexico over Brazil
play read on

Capital Investment, Technology Upgrades to Bolster Mexico’s Diverse Manufacturing Sectors
play read on

Mexico manufacturing set to decelerate
play read on

Energy reform and its impact on the Mexican manufacturing sector
play read on

Brazil leaves Selic rate unchanged at 14.25%; inflation the target but with no timetable
play read on

Rousseff Says Brazil Still Attractive for Foreign Investments
play read on

Fitch: Downward Trend Continues for Latin America Corporate Cash Flow
play read on

Reform to the Mexican Federal Labor Law ("FLL")
play read on

Economic activity in Brazil plunges 4.47% in the last twelve months to August
play read on

Brazil: Health Savings Accounts Coming Soon
play read on

A new test for Mexico’s structural changes: antitrust reform – key points in one chart
play read on

Brazil and Colombia Sign Economic Trade Agreements
play read on

Business Challenges and Tax Pitfalls in Latin America
play read on

The rise of cross-border antitrust investigations: US, Canada and Mexico enforcers meet to discuss even closer collaboration
play read on

Argentine September inflation 1.92% and 25.91% in last twelve months
play read on

Costa Rica, Panama And Puerto Rico Lead As Promising FDI Destinations
play read on

US airlines bet big on Latin America
play read on

IT Multinationals Invest In Data Centers In Brazil Despite Recession
play read on

Latin America Update: global headlines
play read on


Our Free eJournals
GlobalAutoExperts

To visit GlobalAutoExperts Directory, click here.


©2008 GlobalAutoIndustry.com | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120