With a gross domestic product of USD 1,300 billion and a population of more than 130 million, Mexico is the 15th largest economy in the world and the largest Spanish-speaking country. Its strategic geographical position makes it an ideal gateway for companies looking to export to Mexico and expand across North and South America. This opportunity is supported by Mexico’s comprehensive trade policy covering over 50 nations - more than any other country - and its role as the region’s leading manufacturing nation after the United States. As the nearshoring trend accelerates, the potential to export to Mexico and benefit from its strong industrial base continues to grow.

Swedens second largest export market

In 1986, Mexico joined the General Agreement on Tariffs and Trade (GATT) and in 1994, the North American Free Trade Agreement (NAFTA). With these agreements, Mexico shifted from an import substitution industrialisation model to a free trade economy which has had positive impacts on the country’s economic growth.

Mexico is Sweden’s second largest export market in Latin America and the free trade agreement between the EU and Mexico has significantly improved the trade balance. Being a member of USMCA has also made the country more attractive from an investment perspective. Already today, many companies manufacture products in Mexico that are sold across the Americas.  

Possibilities for Swedish companies in Mexico

Mexico offers great potential in several sectors where Sweden is an industry leader, including automotive, mining, energy, IT and telecoms. There is also a growing need for solutions within security and the environmental sector as well as health care and medicine. Foreign investments in Mexico have surged in the past ten years, especially in the automotive industry. Moreover, Mexico's key attractiveness factors are the country’s skilled workforce, cost competitiveness and effective labour relations. Currently, Mexico`s has the 7th largest labour force in the world. Additionally, in 2020 Mexico´s manufacturing cost of labour per hour was USD 1.68  cheaper than that of China. Because of this, most major automotive companies and key suppliers have manufacturing facilities in Mexico, which means potential business opportunities for Swedish subcontractors. 

Potential challenges

Possible obstacles for Swedish companies include corruption and fraud, and it is important to always ask for professional advice if there is any uncertainty. It might also be recommendable to consider how to ensure fair working conditions while maintaining a high level of productivity. 

How we can help you expand

Business Sweden has been active in Mexico since 2003. The office is also responsible for markets in Central America and the Caribbean. We can help you prepare for market entry by producing tailor-made market analyses, giving advice on issues related to corruption and security, finding suitable business partners and much more.