KDI series in Economic Policy and Development
Edited by Sanghoon Ahn, Bronwyn H. Hall and Keun Lee
Chapter 10: Mexico: auto industry and patenting in a technological dependent economy
Mexico has become the eighth auto producer of the world; its top production was reached in 2012 with 3 million units, and is expected to continue growing surpassing other emerging economies. Auto industry has been at the core of the manufacturing modernization of the country in the last twenty years, relying on the investment and technology of foreign producers. In a previous paper (Ruiz 2009) we argued that transnational corporations (TNCs) have been an important means through which local producers have gained access to new technologies and management know-how. Strong business linkages between TNCs and local producers can generate a relationship of trust, alliance, cooperation, knowledge, technical knowledge, and skills. Local producers have gone through a learning process, in particular through supplier development in the auto industry. This process has been one of the most challenging tasks for Mexico, which has attained a semi-integrated auto industry with a large network of auto parts suppliers. Development has gone through different stages. In the period from the 1950s until the 1980s, capacities were developed in assembling; after the North American Free Trade Agreement (NAFTA) entered into effect, investment moved from assembly plants to auto parts production, in order to build up the second and third tier suppliers network required to produce a solid procurement process in Mexico.
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