Economic ties between Mexico and Germany have been strengthened since the European Union – Mexico Free Trade Agreement went into effect in July, 2000. Since then Germany has become Mexico’s fourth largest trading partner.
In 1964, the foundation of Volkswagen in Puebla represents largest German investment in Mexico, specifically the production of the Volkswagen Beetle. In contemporary times, Germany is viewed as a privileged partner in Europe, from whom economic, political and cultural engagement in Mexico is expected.
In 1952, diplomatic relations between the two countries were officially reinstalled, after WW II. Bilateral relations are being intensified in all areas based on a Joint Declaration between the two countries by their Foreign Affairs Ministries signed in 2007.
Germany has its representation in its Embassy in Mexico City and Consulates in Merida, Acapulco, Guadalajara, Mazatlan, Puebla, Chihuahua, Monterrey and Cancun. As for Mexico, the country is represented by its Embassy in Berlin, Consulates in Stuttgart, München, Hannover and Frankfurt.
Relations between the two governments are particularly strong at this time. In 2008, German Chancellor Angela Merkel attended a diplomatic visit to Mexico.
President Felipe Calderon has enjoyed three diplomatic visits to Germany during his five years of Presidency, being the latest at the end of 2010.
Exhibit 1 summarizes the Trade Balance between Mexico and Germany. It shows that commerce between the two countries reached its maximum level in the year 2008, with an important decrease the following year 2009 and recovering in a satisfactory way in 2010. What really stands out is that since 2000 commerce between Mexico and Germany has been evolving very satisfactorily following a path of continuous growth, with the exception of the year 2009.
Several important factors in the trade balance between Mexico and Germany are revealing. Take, for instance, the fact that during the 11 year time span from January 1999 to December 2010, total exports from Mexico to Germany were almost duplicated rising from US$1.9 billion to US$3.6 billion (+84%). And at the same time imports from Germany to Mexico also showed an impressive 120% growth.
Total commerce between the two countries and reciprocal action brought in US$14.7 billion during the 2010 in trade between the two partners. Total commerce between Mexico and Germany showed important improvements, especially during the period since 2005. This was when, for the first time, the total commerce stats were available identifying the US$10 billion. In fact, the period 1999 to 2010 represents a 110% growth rate in total commerce between the two nations. And, in 2010 there was a 13.17% increase in commerce (US$14.6 billion) compared with (US$12.9 billion) in 2009.
Exhibit 2 shows German Investment in Mexico. During the period from January 2000 through June of 2010, companies with capital from Germany invested US$3.8 billion. This amount represents 1.6% of the total invested in Mexico during that time.
According to this information Germany is the seventh largest investor in Mexico during the period January 2000 through June of 2010, and the fourth largest form Europe following Spain (US$37 Billion), Holland (US$32.3 Billion) and the United Kingdom (US$ 7.3 Billion).
Bayer is a German company with over 100 years of presence in Mexico. Bayer of Mexico has been converted at this time into a very strategic and important company that features one of the modern plants of Mexico with wide presence accros the Country. With around 3,500 collaborators, Bayer Mexico reports annual sales of over US$10.2 billion, being one of the foreign subsidiaries of the consortium Bayer worldwide.
BASF is the leading chemical company in the world: The Chemical Company. Its portfolio ranges from chemicals, plastics, performance products, agricultural products and fine chemicals to crude oil and natural gas. In 1978, BASF in Mexico sets as a corporate enterprise itself over time to cover the business of Coatings, Fine Chemicals, styrene and engineering plastics. Since 1993, the company reports to BASF Corporation.
Continuing with BASF, their Altamira site has grown rapidly since the first 110 hectares acquired between 1989 and 1990.
To date, it has 6 manufacturing plants and a marine terminal focused on different businesses, such as: Adhesives, Automotive, Construction, Leather, Paper, Plastic, Textiles, among others. The main production site of the Coatings Division in the NAFTA region is BASF’s plant in Tultitlan, State of Mexico. This site has an area of 71,000 square meters with a current production is 22,000 tons per year, to be manufactured for automotive coatings (OEM and TIER), especially primers, basecoats – Water Base and Solvent Base – and Clearcoats.
Siemens Mexico is part of global conglomerate with presence in over 190 countries and more than 400 thousand employees worldwide. Since its founding over 160 years ago, Siemens has helped to create sustainable value worldwide, providing solutions and services that provide their customers with safe and innovation in strategic areas within the sectors of industry, energy and health.
The Bosch Group is a leading global provider of technology and services in the areas of automotive and industrial technology, consumer goods and building technology. In 2008 generated sales of Euro45.1 billion. Bosch Mexico is a regional division of the Bosch Group, one of the corporations of the largest private industry in the world that consists of 300 subsidiaries and regional companies, with approximately 280,000 associates and 6,000 practitioners.
Volkswagen de Mexico is the undisputed market leader in the segment of middle-class cars in Mexico. In Puebla VW produces around 430,000 cars every year with 14,500 employees for the models Jetta, Bora, New Beetle, New Beetle Cabrio, and Golf Variant.
VW de Mexico plays a pivotal role for the Volkswagen Group with highly qualified employees that produce top-notch quality products for global markets and implement the company’s objectives successfully: Cost-cutting, productivity enhancement, and maximized profit.