Railroads Benefiting From Auto Industry Growth In Mexico
Savvy investors everywhere are taking note of the expanding automotive industry in Mexico and the ripple effect of opportunities it represents.
Thanks to NAFTA, what's good for manufacturing in Mexico can be good for many other countries as well. This is not a temporary state of affairs, and all signs point at the same steady growth to continue in the coming years.
The facts don't lie, and they are all saying the money is there to be made. North American Railroads are already feeling the benefits of increased shipments to Mexico. Mexico's gross domestic product has been predicted to grow 3.4% in 2013 and 2014. Far ahead of the expected growth predicted for Canada and the U.S. It's a good time to be an investor if you’re looking in the direction of Mexico.
The cost of transportation has increased to the point that Mexico is looking to be the best choice to operate any business servicing North America. The world is slowly climbing out of an economical slump, and all the manufacturing in Mexico is helping it happen. Transport by rail has been in use for well over a century, and it still figures as a large part of the future and economic recovery.
In order to compete, greater mobility is needed to deliver products, and one way for Canadian railways to do that would be to purchase the Kansas City Southern line in the United States or negotiate other access to it. The automotive industry isn't the only one moving up fast in Mexico; the aerospace sector is growing right along side it. Plus, with the increase in crude oil by rail, the opportunities just keep growing. Many argued against NAFTA, but the end result has been more jobs in more places.
With access to the swelling Mexican market, stock holders everywhere stand to benefit. Rising wages in other parts of the world, and the cost to have goods shipped via the sea, really cuts into the bottom line. Using the Rail system of the United States solves the high cost of shipping. Right now, you hear about the automotive and aerospace industries but more are coming. Because manufacturing in Mexico makes good sense with railway connections so handy, factories are already under construction for other sectors.
Anyone holding railway stock these days is a wise investor, with a potentially bright future. The Mexican wage is reasonable, add that to affordable shipping, and investing in a facility there makes good, solid sense. Money isn't the only thing a company can save by doing business in Mexico. Every minute spent waiting for a shipment is a cost. When located on the same continent, getting goods from one place to another using the railway system saves time…and money.
Megan Richford
Executive Marketing Asissitant
megan.richford@napsmexico.com
Phone: 858-794-7947
Toll free: 800-551-8581
About NAPS
With over 20 years of experience doing business in Mexico, NAPS can provide expert commentary on trends and changes in the industry. NAPS offers administrative support services for companies manufacturing in Mexico. Administrative services include: Site Selection, HR, Recruitment, Accounting, Payroll, Customs, Environmental and Corporate Compliance. For more information contact NAPS at 858.794-7947 or visit our website.
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