Landing in Mexico, is it considered to be entering the North American market?

Globalization has always been the highest goal of China's auto industry, and domestic brands continue to accelerate their overseas layout not only to open up new battlefields and export foreign exchange, but also to realize their ideals of becoming a global auto giant. After more than ten years of efforts, the current footprint of Chinese automobile brands throughout Southeast Asia, Australia, South America, Africa, the Middle East and other places, export sales continue to rise. With the steady implementation of the globalization strategy, the market focus of Chinese auto brands has gradually shifted from using product cost-effective products to explore developing markets, and gradually shifting from relying on product hard power to challenge developed markets such as Europe and North America.

Among them, North America is one of the most important and developed automobile markets in the world due to the existence of the world's second largest automobile market and the world's largest pickup truck market in the United States, which has become the focus of some Chinese auto brands, trying to label the North American market in many aspects such as products and marketing. Mexico, as a relatively special presence among the three North American countries, is regarded by some Chinese brands as an excellent springboard to enter the North American trade system, enter the North American automobile market, and create a publicity and marketing flashpoint, so will Mexico be the son of this natural choice?

Three North American countries? Latin America is where Mexico belongs

First, Mexico does not belong to North America at the level of a real market economy.

Mexico is located in North America, bordering the United States in the north, and connected to South America through Central America in the south, sitting on the economically developed North American Free Trade Area on the one hand, facing the vast Latin American market on the other hand; bordering the Pacific Ocean in the west and the Gulf of Mexico and the Atlantic Ocean in the east, is a typical two-ocean power. In addition, Mexico is also a member of the North American Free Trade Area and one of the most open economies in the world, and has signed free trade agreements with 45 countries, with unique location advantages and resource advantages. So far, as many as dozens of auto industry-related brands have invested in Mexico, including ford, GM, Volkswagen, Toyota, Honda, Nissan and other international giants, which is the world's most important auto parts production and export region.

In this way, Mexico is indeed a strategic location across the North and South American markets. But in fact, from the perspective of actual political economy, the North American market is actually only the United States and Canada, or only the United States. The United States, which has always regarded Latin America as its own backyard garden, has never envisioned that Mexico will truly be included in the North American market economic system, nor will it allow Mexico to become the entry point of the U.S. economy, so the United States has always only regarded Mexico as an overseas factory, a place of raw material production and a dumping ground for products. In fact, Mexico belongs to Latin America, which refers to the Region of the Americas south of the United States, including Mexico, Argentina, Brazil, Chile and other countries. Latin America has the same linguistic, cultural and religious foundation, relying on resource exports, product processing, undertaking industrial transfer and other ways to develop, and the United States and Canada have natural differences, never standing at the same table players.

The world's important automobile production site, but the development of the industry is subject to people

Second, the Mexican auto industry is subject to people and does not take the initiative.

Mexico does not have a local automobile industry, and the rapid development of the local automobile industry is mainly due to the large number of American and Japanese automobile manufacturers in recent years to invest in Mexico. On the one hand, it undertakes industrial transfer from Ford, General Motors, Chrysler and other American automobile companies, which is a supplement to the American automobile industry; on the other hand, it uses low tariffs and low costs to attract investment from other countries interested in the North American market, such as Volkswagen, Nissan, and Toyota. Mexico's annual automobile production is about 3.7 million units, of which more than 80% is used for export, and the main significance of the existence of the local automobile industry is to supply the United States. Although this provides a springboard for auto brands to enter the North American market, it also makes the Mexican auto industry very vulnerable to the influence of the United States.

When the United States is in a state of tolerance and openness, Mexico is the gateway for auto brands from all over the world to participate in the competition in the US market, and if it turns to a state of contraction, even the interests of American domestic companies in Mexico will be damaged. In the past two years, in order to achieve the return of manufacturing, the United States has imposed tariffs on Mexico many times, and after the impact of the epidemic, it has hit the local automobile industry hugely, and Brands such as Ford and General Motors have had to suspend investment in Mexico. At present, the export of Chinese automobile brands is mainly in the form of vehicles and CKDs, and exports to Mexico rely more on bulk orders in the industry than on retail market sales. In this way, compared with the local investment in the establishment of factories to implement local production of brands have no competitive advantage, not only do not have the strength to actively challenge the developed market in North America, subjective initiative, but also lack the ability to resist the fluctuations of the Mexican market.

The world's most closed automobile market, landing in North America is extremely difficult

Finally, the U.S. market is unusually closed.

As the world's second largest auto market, the United States is not as open, free, and even very "closed" as imagined. In order to protect its own enterprises, the United States often ignores the WTO agreements, ignores the reality of economic globalization, and imposes retaliatory tariffs on the products of other countries, and is the country with the most serious trend of trade protectionism in the world. A classic example is the chicken tax, which was originally a retaliatory 25 percent tariff imposed by the United States on European agricultural and sideline imports in the 1960s, and then light trucks (commercial vehicles in the broad sense) were also included in the chicken tax, which is still levied today.

Trade protectionism makes it possible for other auto brands to set up factories in the United States or Mexico to invest in order to meet the entry threshold of the US market. And the company opened by another country's brand must be a purely American enterprise to gain further trust from the government and the market, such as the number of jobs required by the local government, and the internal management of the regional factory enterprise is American.

In addition, U.S. consumers have a very high level of recognition of their own brands. The main consumer groups of pickup trucks in the United States are manual workers, middle class and so on. They either have money and energy and need a car tow a caravan and yacht; or they like to modify and have a fondness for the large-displacement V8; or they like the multi-functional cost performance of pickup trucks, or they take the car as their home. As the bottom and middle of American society, most of these consumers are staunch patriots and have a natural BUFF blessing for American cars. Coupled with the fact that the chicken tax has been closed to the country for many years, it has long formed a trust in American cars, and it is difficult for brands in other countries to break this consumer belief.