Mexico represents, together with Brazil, the main destination market for Italian companies that want sell abroad, with particular focus in Latin America.
Currently, these two countries offer the most interesting demand prospects in the Latam area.
Focusing on Mexico, the reasons for this trend derive from GDP growth and manufacturing activity, together with the control of inflation, as indicated byIMF in its report last October.
The strengthening of its international position is also due to the recent phenomenon of nearshoring, which is providing the nation with important development opportunities.
Also noteworthy is the increase in foreign investments in the country: in 2022 they reached 35 billion dollars, returning to the pre-pandemic levels of 2019. A figure that differs from the global trend, characterized in the same period by a 12% drop in flows of investments, influenced by multiple crises at a global level, including the war in Ukraine, inflationary pressures, the risk of recession and the burden of debt of the main world economies.
With a population of 130 million, Mexico is the second largest country in Latin America in both demographic and economic size.
By virtue of its strategic geographical position and the numerous free trade agreements in force (such as the USMCA with the United States and Canada), the country represents an advantageous market for many Italian companies that decide to sell abroad.
In particular, exports to the nation are also favored byagreement of Economic Association, Political Concertation and Cooperation between the European Union and Mexico, which in addition to promoting tariff-free trade between the two parties, offers protection for European products, concessions for financial services and facilitates participation in tenders contract.
Thank you Given these factors, Italian exports of goods to Mexico have recorded notable growth in the last ten years.
In 2022, with a historic record of 5.5 billion euros of exported goods, Mexico once again became the main destination of theItalian export in Latin America, with an increase of 44.2% compared to the previous year.
At a sectoral level, the main products exported from Italy to Mexico include machinery, metallurgical, chemical and plastic products, as well as electrical appliances, which represent 80% of the total. The remaining 20% includes products such as clothing, jewelry, furniture and food, demand for which is supported by economic growth and the rise of Mexico's middle class.
In detail, here is the product composition of Italian exports to the country:
Exports of intermediate goods, particularly in the chemicals, rubber and plastics and metals sectors, are expected to increase in 2023-2024, in line with the expected strengthening of the local manufacturing sector. The instrumental mechanics sector also shows good growth, recording a +3.7%.
Let's take a closer look at further elements that make the idea of penetrating the Mexican market particularly advantageous for those who wish to sell abroad:
Economic stability
As we mentioned previously, the Mexican economy stands out for its GDP growth and financial solidity, supported by the increase in domestic consumption and the increase in investments and exports.
Young population and qualified workforce
Mexico boasts a young population, with an average age of less than 28 years. The workforce is qualified and competitive, with low costs.
Industrial and technological infrastructures
Highly specialized industrial parks and technology centers are present in the country, providing supporting infrastructure for businesses. Furthermore, local institutions offer incentives for investments and the development of projects linked to the territory.
These factors combined make Mexico an interesting investment destination, offering ample opportunities for Italian companies that want to expand their business beyond national borders.
Important manufacturing hub in Latin America
Mexico is proving to be the alternative to China for the United States. Thanks to geographic proximity, more and more US companies are looking for partners or investing in Mexico in order to redesign their global supply chain, further disengaging from China.
In anticipation, Mexico will continue to be an important end market, offering numerous business opportunities for Italian companies.
Specifically, we talk about:
In particular, it should be underlined that the food and beverage sector provides particularly promising prospects, especially when considering the updating of thefree trade agreement between the EU and Mexico.
This act further incentivized Italian exports, thanks to the protection of typical geographical indications and the reduction of customs tariffs on imports.
If you wish to undertake an internationalization path in the country, do not hesitate to contact us.
Thanks to the experience and knowledge of our team of professionals, Octagona can provide you information on how to sell abroad successfully, and give you support in every activity necessary to significantly expand your business.
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