Sixty-five percent of televisions bought in the USA are Made in Mexico.
Tijuana is recognized as being a world leader in the production of plasma, HDTV and LCD television sets. As such, it is the main factor that has resulted in sixty-five percent of units purchased in the United States have their origin in Mexican factories. At the present Tijuana manufacturers of television sets are experiencing a degree of uncertainty as they await new regulations under consideration by the Mexican Congress that address revamped regional technological requirements related to their production. In particular, manufacturers have expressed concern over the possible requirement that Tijuana manufacturers, as well as other television set producers in Mexico, source specific, locally scarce components within their own plants by either producing them for
themselves, or through third-party cooperation. The television components in question are the motherboard and the LCD panel. Leaders of both companies that are Tijuana manufacturers of television sets, and, in the broader electronics industry. have expressed that such a new requirement would be “impossible” to comply with at present. Although the goal of the Mexican government is to integrate more local firms into the national industry supply chain, Tijuana manufacturers of televisions believe that developing an adequate base of suppliers of motherboards and LCDs in a timely and cost-effective manner is feasible.
New rules must take competitive conditions into account
While the North West regional president of CANIETI (Mexico’s National Chamber of Commerce for the Electronics Industry), Jose Luis Castellanos is in agreement that changes need to be made in the rules that govern Tijuana manufacturers, as well as other Mexican firms engaged in the production of television sets, he also believes that care must be taken to adopt rules that do not put Mexico at a global competitive disadvantage as a result of increasing the cross structure of the country’s television producers. The CANIETI official has pointed out that, although the technology for television sets today is LCD and LED, “the rules that regulate television manufacturing in Mexico today are applicable to CRT technology.” Castellanos believes that mistakes made in formulating and implementing new rules for television manufacturers in Mexico will result in a loss of market share from Asian companies.
Because a three year program through which the Mexican government has been subsidizing the purchase of 23.6-inch LCD panels from overseas is scheduled to sunset in 2016, some believe that the government will stick to its planned requirements. As a result of the implementation of this measure Taiwanese companies Innolux and Foxconn Electronics LCD sales recently reached a shipment volume of 1-1.5 million units per month.
Given the cost issues that would be associated with a quick ramp up of domestic production of motherboards and LCD panels, Castellanos, Tijuana manufacturers of televisions and other electronics industry leaders are requesting that Mexican lawmakers think carefully in order to devise rules that will not upset Mexico’s position as the preeminent supply of the product to the United States.