To better understand what the business environment is like for Japanese companies, \u00a0JETRO elaborates a business outlook survey among Japanese companies established in Latin America, specifically in Mexico, Brazil, Argentina, Colombia, Chile, Peru, and Venezuela. In the last survey, conducted in 4Q25, 745 Japanese companies established in those countries were surveyed, and more than half of them responded, equivalent to 56.4% (420 companies). This article will focus on the responses of Japanese companies that are based in Mexico.\u00a0<\/p>\n
Today, Japanese companies have more than 1,600 locations in Mexico. JETRO collected information from a representative sample from across the country. In total, we surveyed 371 Japanese companies, 50% of which responded (186). These companies operate in different industries, including automotive, chemical products, plastic products, agriproducts, textiles, electrical and electronic equipment, medical equipment, and pharmaceutical products. This article describes the overall business environment in Mexico based on the responses of Japanese companies on topics such as operating results, business expectations for the next one to two years, expectations regarding the impact from US tariffs, and finally, their perception of the investment environment.\u00a0<\/p>\n
First, regarding operating results, 70% reported profits, only 13% reported losses, and the rest were neutral. Japanese companies in Mexico pointed out that the main reasons for their improved performance are increased demand in the local market, higher productivity, growing demand in the export market, sales effectiveness, conversion rates, strengthening of the sales structure in the local market, and the increasing of market share due to reduced competition from other companies. On the contrary, high labor costs and increased raw material procurement costs are some of the main reasons for losses.\u00a0<\/p>\n
Second, concerning expectations for business in Mexico during the next one to two years, 45.2% of Japanese companies are planning to expand their operations in the country, while 50.5% of Japanese companies consider that their operations will remain in the country without expansion or any significant improvement. Only 4.3% are planning to reduce their operations. For the moment, none of the companies are planning to leave the country or stop their operations in the next one to two years.\u00a0<\/p>\n
Nevertheless, since 2023, new investments have been declining, and some companies mentioned that, due to the inability to predict whether the Trump administration will implement additional restrictive policies, their expansion plans in Mexico have been postponed. Among the reasons cited were the uncertainty surrounding the Trump administration\u2019s policies and the potential impact of the results of the USMCA review.\u00a0In general, the main concerns that could impact the decision to expand operations in Mexico, or to consider another country as a new location, are the possible decrease in demand for their products or services due to the increase in tariffs and other restrictive policies of the United States, as well as an increase in labor costs.\u00a0<\/p>\n
Third, regarding perceptions of the impact of Trump\u2019s tariff policy, Japanese companies in the automotive sector, as well as those that manufacture products using iron, steel and aluminum, and those that import machinery in general, mentioned that they are affected by the current policy, and there is also a widespread concern about the future of the USMCA. When asked about the measures they might take to address US tariff policy, Japanese companies responded that reducing company costs, increasing sales in the local market, negotiating prices with suppliers, and centralizing suppliers would be the measures they might consider implementing in the short term.\u00a0<\/p>\n
Finally, regarding perceptions of the investment environment, there is growing concern about rising insecurity in Mexico.\u00a0Out of a total of 170 responses from Japanese companies, 34.1% mentioned that the complexity of government administrative procedures and delays are the main drawbacks to investment, but 32.9% said that local insecurity faced by expatriates is another important obstacle.\u00a0<\/p>\n
Regarding the advantages that Mexico offers, market size and growth potential were cited by 84.6%, while the labor environment, including labor cost and quality of personnel, were cited by 9.5% of surveyed companies. Several companies noted that one of Mexico\u2019s major advantages is its geographical proximity to the United States, and they hope that the USMCA will continue. They also expect further development of energy policy to promote better business opportunities.\u00a0<\/p>\n
Another key point to highlight is human resources recruitment. The primary concern for Japanese companies is the rising demand for higher wages and benefits, followed by increased competition with other firms for staff recruitment. The main competitors for Japanese companies are other Japanese companies themselves, while competition with Chinese firms is also on the rise. This trend is evident in other Latin American countries, such as Brazil and Peru.\u00a0\u00a0<\/p>\n
In conclusion, at least for the near future, it seems that Japanese companies\u2019 outlook remains positive, although with some reservations. Most Japanese companies are worried about the negotiation process of the USMCA, the increase in insecurity, accelerating increase in labor costs, and rising inflation. Mexico still holds a certain competitive advantage over some Latin American countries; however, it is extremely important to work toward fostering a stronger business environment with less uncertainty to attract new investment from Japanese companies.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"To better understand what the business environment is like for Japanese companies, \u00a0JETRO elaborates a business outlook survey…\n","protected":false},"author":2,"featured_media":39547,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[7668,217,215,29019,7947,3048,29021,24673,214,216,5645,29022,10645,29023,4761,6642,6639,5648,6640,29020,2542,6644],"class_list":["post-39546","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-automotive-industry","tag-business","tag-business-of-japan","tag-business-outlook","tag-economic-uncertainty","tag-foreign-direct-investment","tag-infrastructure-and-energy","tag-japan-external-trade-organization-jetro","tag-japans-business","tag-japanese-business","tag-japanese-companies","tag-labor-costs","tag-latin-america","tag-market-demand","tag-mexico","tag-neysa-criollo","tag-policy-economy","tag-supply-chain","tag-trade-investment","tag-trade-tariffs","tag-trump-administration","tag-usmca"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/39546","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=39546"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/39546\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/39547"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=39546"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=39546"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=39546"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}