1. Business opportunities in Mexico November 13 th, 2012

2. Competitiveness indicators For fourth consecutive year, Mexico improved its position. Beyond BRIC’s. Reforms that enhanced our ranking: –Starting a business (+39). –Getting electricity (+12). –Dealing with construction permits (+7) Source: World Bank, 2012;, World Economic Forum 2012; IMD, 2012. 2012 2011 WEF COMPETITIVENESS REPORT (2010-2012) WB DOING BUSINESS (2011-2013) Mexico registered the best ranking in its history. –Our country advanced in 9 of the 12 pillars. –Great advances in business sophistication, innovation and financial market development. Mexico was the only country in Latin America that climbed positions in this ranking. –We are one of the most competitive countries of America. –We are above Russia and Turkey. IMD COMPETITIVENESS YEARBOOK (2010-2012) 2 China Brazil Mexico India Russia 48 91 112 130 132 Mexico China Russia Brazil India 29 48 53 59 67 China India Mexico Brazil Russia 23 35 37 46 48

3. Mexico ranks in the top 20 of Harvard and MIT’s Atlas of Economic Complexity Recognizes that our country holds vast amounts of productive knowledge We manufacture and export a large number of sophisticated goods 80% of Mexican exports in 2011 were manufactured goods. Our exports have grown 28 times in the last 25 years. The Index of Technological Sophistication of Mexican export products (3.25) is the highest in Latin America and above India and Brazil. (OECD) 115,000 engineers graduate every year from science and technology programs. A high degree of economic complexity 3 Source: INEGI, Presidency and Harvard/MIT, Atlas of Economic Complexity.

4. COUNTRY BrazilRussiaIndiaChinaMexicoIndonesia South Korea Turkey BRICMIST 1. Macroeconomic environment 2. Open economy 3. Economic complexity 4. Total manufacturing cost 5. Domestic market 6. Demography 7. Workforce quality 8. Engineering graduates (per capita) 9. Democratic system 10. Human Development Index Equal or above MexicoBelow Mexico, but closeClearly under Mexico Source: 1. Macroeconomic Environment: WEF The Global Competitiveness Report 2011-2012, Macroeconomic Environment/ 2. Open Economy: Doing Business 2012, Ease of Doing Business/ 3. Economic Sophistication: The Atlas of Economic Complexity, Harvard University/ 4. Total Manufacturing Cost, Manufacturing Outsourcing Cost Index, Alix Partners/ 5. Domestic Market: WEF The Global Competitiveness Report 2011-2012, Domestic Market Size Index/ 6. Demographic Bonus: UN World Population Prospects. The 2010 Revision. Forecast of total dependency rate in 2025 (population <15 & 65+ years) (15-64)/ 7. Labor availability and quality of the DFI Benchmark, Automotive OEM, Skills, attitudes and productivity/ 8. Engineering Graduates (per capita): UNESCO Institute for Statistics, International Monetary Fund. Engineering, manufacturing and construction graduates per capita 2009/ 9. Democratic System: The Economist, Democracy Index 2011/ 10. Human Development Index: UN, Human Development Index. Measuring methodology: Mexico’s position is the baseline in each index or study cited. In green are identified those countries that score higher, equal or up to 10% below Mexico. In yellow, those between 11% and 20% below Mexico. In red, those which score is more than 20% lower than Mexico’s. Mexico is a well positioned country 4

5. LATAM’s tech Exports (2011) Source: IHS Data – Global Insight; ProMéxico’s Analysis. Data in USD real terms, 2005. 5 Mexico vs. LATAM

6. Mexico’s good news are all around 6 Growth forecasts for the largest emerging economies of China and Brazil are being downgraded, whereas Mexico has recently seen positive revisions to their GDP growth predictions. Mexico has a few other tricks up its sleeve. One of them is demography: Mexico is about to begin a couple of decades where the ratio of workers to dependents is especially favorable. Few countries have regained all the ground they lost when world stock markets plunged during the financial crisis of 2007-9; and Mexico is at the top of the charts Mexico as the new China thanks to its growth in consumer-spending activity and its export-driven-economy based on manufactures. Mexico, which has been flying under the radar for most, is actually on track to become the largest Latin American economy in the years to come. Mexico is getting a lot of love these days. The declaration comes from JPMorgan, which said it would make a capital increase to further expand its business in Mexico.

7. Jetta Bicentenario (VW)SkyworksMabeIntel Design Center SilanesHoneywell (A350) Flexible manufacturing (Ford) Bombardier Learjet 85 SAFRAN Ericsson (Global Service Center) GE (Genx turbine)Siemens Mexico: an excellent business case for advanced manufacturing…And more

8. www.promexico.gob.mx enrique.haro@promexico.gob.mx @ProMexicoTW +52 (55) 54 47 7000 Camino a Santa Teresa 1679, Col. Jardines del Pedregal CP 01900, México, D.F.

9. MEDICAL DEVICES We are the largest exporter in Latin America and main supplier to the US. AUTOMOTIVE AND AUTOPARTS 8 th producer and 4 th exporter globally of new light vehicles in the world (Q1 2012). 11% of light vehicles sold in the US were produced in Mexico. Mexico is the main auto parts supplier to the US. AEROSPACE Mexico is the 6th supplier to the American aerospace industry. The number of companies grew 4 times since 2005. ELECTRIC-ELECTRONIC Leading flat television screen exporter in the world. The second refrigerator exporter. Source: FEMIA/ GTA/ AMIA/ OICA.. 350 billions in exports 80% manufactures 53% medium and high tech manufactures Leadership in key sectors 9

10. Source: Goldman Sachs. The N-11: More Than an Acronym. Global Economics Paper No: 153. March, 2007/ HSBC. 1/ Goldman Sachs forecast / International Monetary Fund. 2050 1 5th place 11th place 2011 Goldman Sach’s Forecast Gross Domestic Product (Billion Dollars) Mexico will be one of the top 10 economies 10 Goldman Sachs estimates that Mexico will be the 5 th largest economy by 2050. World's largest GDP measured by PPP (Billion Dollars) According to HSBC Mexico will be the 8 th largest economy in the world by 2050. According to Accenture, Mexico will be one of the Big Six in 2025.

11. ProMéxico’s strategy ManufacturesServices Automotive Aerospace E&E Renewable energies and energy efficiency Creative industries IT Added value Agro- industry (integral) Mining (integral) Sectors Primary Economy Secondary Economy Tertiary Economy Life Sciences Infrastructure, educative services and economic policy 11

12. Aerospace Source: KPMG/ US Census Bureau/ Ministry of Economy/ Bombardier. 12 According to KPMG, aerospace parts manufacturing costs in Mexico are approximately 16% lower than in the United States. There are 249 aerospace companies in Mexico. In 2011, exports from this sector exceeded 4.3 billion dollars. Mexico has the second largest fleet of business jets in the world (after the US). Bombardier’s first composite business jet will be manufactured in Mexico. Mexico is the 6 th supplier to the American aerospace industry.

13. Automotive  Mexico is the 8 th vehicle producer in the world.  And the 4 th exporter globally of new light vehicles in the world (Q1 2012).  We export almost three times more than Brazil and India combined.  We are a strategic supplier to the North and Latin American automotive markets.  In 2011, Mexico was the leading autoparts supplier to the United States.  Eleven of every 100 light automobiles sold in the United States are manufactured in Mexico.  84 of the top 100 autoparts companies in the world have production facilities in Mexico. Source: OICA/ Global Trade Atlas/ AMIA/ Ward’s Automotive Reports/ AASA, 2011. 13 Ford’s plant in Hermosillo, Mexico, is the only facility in the world to produce the new Fusion model and the Lincoln MKZ.

14. Source: Unlocking The Sunbelt, EPIA/ Mexican Geothermics Association, AMG/ Atlas of Wind Resources, AMDEE/ KPMG. Renewable energies 14 Mexico’s wind potential is estimated at 71,000 MW. Mexico is among the countries with the highest sun exposure. It is part of the “Solar Belt” and could generate enough energy to be self- sufficient and export. Average of 5-6 KWh/m 2. Mexico is ranked 4 th globally in geothermal energy generation. Mexico has an hydric potential of 53,000 MW. One of the most important in Latin America. Mexico is the leading photovoltaic module supplier in Latin America. With a production capacity that exceeds that of Brazil, Chile and Argentina. According to KPMG, solar cells and advanced battery production costs in Mexico are 13% lower than in the United States.