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June 28, 2018
‘Viva Latin America! Deepening Ties With Japan’ Vol.3: Making "Automobiles" the Pillar of the Economy: The Shape of Cooperation in the Semi-developed Country Mexico

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Automobile powerhouse Mexico. Many Japanese automobiles can be seen locally.

With a population of more than 100 million, Mexico is Central America's largest country. This year marks the 130th anniversary of the conclusion of the Japan-Mexico Treaty of Amity, Commerce, and Navigation that established diplomatic relations between the two countries. Signs advertising Toyota, Mazda, Honda and other Japanese automobile manufacturers line the streets in the State of Guanajuato in central Mexico. The Japanese greeting yokoso ("Welcome") is even mixed in with Spanish. Many of these signs were erected in the past few years. Over the past decade, the number of Japanese companies in Mexico has tripled to over 1,100, with the number of automobiles produced growing to the level of 4 million per year, seventh highest in the world. In that context, JICA has begun cooperation specific to automobiles, the pillar of the Mexican economy. We would like to introduce you to a cooperation setting that could only happen in semi-developed countries.

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Trends in the number of automobiles produced for export and for domestic sale in Mexico in recent years (Unit: 1,000 vehicles) Based on materials from the Mexican Automotive Industry Association.

Collaboration with Japanese Companies for Human Resources Development; Dispatching "Teachers" to Vocational High Schools

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Mexican Teachers Participating in Training

In February, at a technical high school in the State of Guanajuato, Takato Shuhama, a lecturer at Nissan Motor's Nissan Learning Center Site Management School, worked face-to-face with Mexican teachers.

"At a manufacturing site, the key is to streamline, reducing the amount of time required for work even by one second." Everyone in attendance fervently wrote down Shuhama's words. They were teachers at the high school, trainees in JICA’s "Project for Human Resource Development for the Automotive Industry in El Bajio of Mexico." On this day, they learned about ways to reduce waste on the manufacturing line and defective products.

In recent years, good access to North American markets, the North American Free Trade Agreement (NAFTA), and other factors have created a context for expanding investment in Mexico's automobile industry. However, the percentage of parts procured locally by Japanese companies is low, at an estimated 10% to 30%, and a lack of technical expertise prevents Mexican companies from meeting quality standards. Technological improvements at Mexican companies lead to reduced costs and shorter lead times that enable local Japanese companies to expand production. Accordingly, JICA has worked since 2015 to prepare the soil for human resources development through training of teachers from four technical high schools in three states in Mexico.

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Structure of the Automobile Industry Human Resources Development Project

Technology Support at Increases Transactions at 80percent of Local Companies

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Work at a Mexican Company that Adopted Kaizen

In addition to training at vocational high schools, JICA provides technical guidance to local companies. For three years starting in 2012, Japanese specialists were dispatched to 27 Mexican parts manufacturers. The companies adopted "Kaizen" as a way to improve quality and productivity. As a result, approximately 80percent of the companies were able to establish new transactions with Japanese companies. JICA is restarting this technical guidance in June this year, and plan to implement it at approximately 120 Mexican companies and other organizations over a five-year period.

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Training at the Mazda Museum

Further, to facilitate the enhancement of corporate support by public agencies, JICA has invited a total of 20 Mexican governmental representatives to Japan up to this point, taking them to Toyota's plant, the offices of the Miyagi Prefectural Government, which is working hard on revitalizing the automobile industry, and other locations. After returning to Mexico, they have been working on the formulation of policies for public support centered on Kaizen.

130 Years of Diplomacy: Toward Further Economic Partnerships

Since the 1990s, JICA has continued to stimulate small and medium-sized companies and supporting industries in Mexico, and to provide technical cooperation in for the manufacturing of plastic, electronic products, and other products. As Mexico becomes a semi-developed country, the key will be gaining international competitiveness. Efforts focused on the automobile industry to expand production by Mexican and Japanese companies could be said to be the shape of cooperation with an eye to the future of the semi-developed country. We will continue working toward Mexico's sustained growth, and becoming a partner in reducing poverty and disparity in the Central and South American region.

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