On Aug. 15th, local time, YIZUMI Mexico hosted an open house in Queretaro, marking an important step in the company's global layout, and a firm commitment and concrete practice to deeply cultivate the North and Latin American markets and serve global customers.
YIZUMI's globalization strategy is steadily progressing, which is more than just market expansion. It is a comprehensive, in-depth, and diverse international development plan. The establishment of YIZUMI Mexico exemplifies YIZUMI's deep understanding and proactive response to global economic trends.
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YIZUMI Has Roots in North America for Over a Decade
Mexico Subsidiary Will Propel NEVs Going Global
Mexico, located in the southern part of North America, has become a key hub connecting the North and South American markets due to its unique geographical location. With the support of the United States-Mexico-Canada Agreement, its manufacturing industry plays a vital role on the global economic stage.
Mexico, the world's tenth most populous country, not only has a large population base, but also possesses a young and relatively skilled workforce, providing abundant human resources support for its manufacturing industry. Because of its solid industrial foundation, the Mexican manufacturing industry is full of charm, attracting a historic high of foreign direct investment in 2023, with the manufacturing industry leading the way, particularly in the automotive, food, metal, and pharmaceutical industries.
Since 2011, YIZUMI has successfully entered North America by acquiring the century-old American machinery manufacturer HPM. The establishment of YIZUMI Mexico marks a major milestone in the company's globalization, indicating that its position in the North and Latin American manufacturing industry will be further strengthened.
Mr. James Zhang, Deputy Managing Director of YIZUMI, General Manager of YIZUMI Injection Molding Machine Division, and Director of YIZUMI Global Business Development & Management Committee, emphasizes that the establishment of YIZUMI Mexico significantly increases time efficiency.
He explains, "Mexico is far from China, making it difficult for YIZUMI headquarters to respond promptly to the local customer needs. As a result, we have decided to establish a subsidiary here to address the distance issue and better serve local customers in North and Latin America, expand YIZUMI's service network in Americas, shorten delivery time, and provide more timely technical support."
Products produced in Mexico are less expensive to ship to North America and can even reach South America. Related studies have indicated that compared to Asia, the time required to deliver goods from Mexico to North American customers has been reduced by 75%.
Many Chinese companies have been accelerating their strategic transition from "exporting" to "going global" in recent years, thereby boosting the influence of Chinese manufacturing, particularly in the automobile and its upstream and downstream industries. As the world's seventh largest automobile producer and fifth largest component producer, Mexico has a strong growth momentum and potential in the automotive industry. In 2022, Mexico's vehicle assembly reached 3.308 million units, with light vehicle sales rising to 1.086 million units and the output value of automotive components reaching 110.5 billion US dollars.
Furthermore, Mexico is actively promoting a new energy transformation in the automotive industry, with the goal of shifting half of car production to electric vehicles by 2030. With abundant lithium reserves, Mexico has a natural advantage for its future development in the field of electric vehicles.
As more new energy vehicle manufacturers expand into Mexico, YIZUMI's injection molding, die casting, and rubber injection molding equipment can be widely used to produce various new energy vehicle components. For this, Mr. James Zhang says, "We look forward to collaborating with more overseas new energy vehicle companies to seek new development opportunities, and provide more choices and development momentum for the Mexican market as well as the global industrial supply chain."
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Strengthening Global Supply Chain Resilience Empowers YIZUMI's Growth in Overseas Markets
In the face of global economic uncertainty, companies that make breakthroughs in overseas markets usually show some characteristics, which are primarily reflected in the total revenue of overseas markets, the sales share of overseas revenue, and the extent of export business expansion. These key indicators define a company's strength and growth potential in the global competition.
"Global Operation" is one of YIZUMI's three key development strategies, emphasizing the importance of overseas markets. YIZUMI's mission is "Global expertise - Solutions for the world", and it is committed to becoming a world-class molding equipment solution provider with the belief in "Sustainable, innovative technology for humankind".
According to YIZUMI's 2023 financial report, the company's overseas operating revenue reached 1.094 billion Yuan, a 20.07% year-on-year rise and 26.72% of total sales, indicating YIZUMI's rapid expansion in the global market. However, if companies wish to grow further in overseas markets, supply chain resilience has emerged as a key factor for stable development and expansion.
The global economic landscape has changed in recent years, and countries have taken actions to improve self-sufficiency and localization of national manufacturing industries to ensure the independence and control of key manufacturing capacities. This change has increased the inherent risks of previous long-distance and geographically focused supply chain models, and has also brought new challenges for global procurement strategies. To cope with the changes, companies must show greater adaptability and profundity in supply chain planning and implementation.
In response, Mr. Samson Chen, Deputy Managing Director and COO of YIZUMI, stressed the importance of YIZUMI Mexico in the company's global supply chain. He stated, "By establishing a subsidiary in Mexico, YIZUMI will be able to save shipping costs and time while increasing supply chain efficiency and flexibility. Furthermore, YIZUMI Mexico will serve as a regional logistics and spare parts warehouse hub, meeting supply demand across North and Latin American markets. We believe that YIZUMI will better integrate global resources, optimize supply chain management, and increase overall competitiveness with this strategic layout."
According to the 2022 Accenture Chinese Enterprises Internationalization Research report, the soaring period of internationalization for Chinese enterprises going global is when the proportion of overseas operating revenue exceeds 20% but does not exceed 50%. During this period, these enterprises have solved the majority of the problems and challenges, and they are able to steadily expand their overseas business in the overseas markets.
Based on this definition, YIZUMI is in the peak period of internationalization with plans to increase its strategic footprint and resource investment in overseas markets. By 2030, sales in domestic and overseas markets are expected to account for 50% each, further cementing its global position.
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Strengthening the Localized Operating Mode Accelerates Overseas Expansion and Service Upgrades
YIZUMI is continually improving its localized operating mode as it enters the international market. Building a talent team with a global perspective is critical for Chinese enterprises to succeed in the global market, as well as a key task that YIZUMI has always prioritized and actively pushed. However, the complexities of cultural assimilation are a tough challenge that must be addressed. Companies may face problems in entering local markets and improving operational efficiency as a result of cultural variations and communication styles.
Mr. Alex Sun, General Manager of YIZUMI Mexico, says, "We have adopted a comprehensive strategy to adapt to the local culture and economic climate in Mexico. During the early phases, we got a thorough understanding of local industry features and customer needs through deep market research. This action not only coincides with the company's "Global Operation" development strategy, but also enables faster localized services. To deepen this strategy, we are assembling a team of local employees and Chinese experts, which allows us to better understand and address local customer needs while providing customized solutions. By recruiting and training local employees, we can better integrate into the local culture and response more effectively to customer needs. Furthermore, we have strengthened our partnership with local agents to ensure our service effectiveness. All of these measures will help us adapt more rapidly to the local market, increasing customer satisfaction and market competitiveness."
YIZUMI Mexico has currently recruited several local employees for key positions in logistics, finance, sales, and after-sales service. This professional team will continue to collaborate with its local partners and customers to improve YIZUMI's localized technical support and service skills, respond rapidly to market and customer needs, and offer competitive solutions. With the continued growth of the team, YIZUMI's business development in Mexico will open up new prospects.
The establishment of YIZUMI Mexico exemplifies the company's global operational strategy, as well as a tangible reflection of its commitment to cultivating the North American market and serving global customers. Through its Mexican subsidiary, YIZUMI has not only improved its service capabilities for the North and Latin American market, but has also demonstrated its strength and goal of becoming a global leader in the molding equipment industry through technological innovation and localized operations.
With the deeper implementation of the globalization strategy, YIZUMI will continue to collaborate with global partners to promote the prosperity and development of the manufacturing industry, and provide better products and services to global customers.
