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Mexico, Brazil Lead the Way in Latin America

Aug. 11, 2014
Electronics distributor grows in Latin America despite slowing economic conditions.

Though business conditions in Latin America have slowed recently, some U.S.-based distributors are continuing along the growth path they have developed there in the last few years. Mouser Electronics, for instance, expects to see substantial growth in the region this year and is expanding its presence with more refined marketing programs and additional staff focused on Mexico and Brazil, in particular.  

Steve Newland, Courtesy of Mouser

“[Latin America] is still a small part of our business in the grand scheme of things, but it’s fast-growing,” says Mouser’s Steve Newland. “My forecast for Latin America is that we’ll continue on the track we’re on and finish up total growth at over 35% for the year.”

Mouser serves the same design engineering and procurement customer base in the region that it serves elsewhere in the world, with a focus on delivering the newest technology in any quantity “really quick,” explains Newland, the distributor’s senior vice president of Americas sales and global sales operations.

The company is building business with new customers in a wide range of industries, Newland adds, despite the many and varied challenges of doing business throughout the region. Newland and his colleague Mauro Salomao, the company’s Latin America sales manager, point to the often-changing business rules and regulations in countries throughout Latin America combined with the need for cultural and language adaptation as two examples.

Those challenges have been exacerbated recently as Brazil’s economy has slowed and following slower conditions in Mexico last year. The Manufacturers Alliance for Productivity and Innovation (MAPI), which represents global manufacturing companies, revised down its outlook for Brazil’s economy this year and next year, citing a struggling manufacturing sector. This year’s World Cup events did not provide the boost MAPI had expected, with analysts predicting a manufacturing contraction in the second quarter of this year and a weak third quarter at best, according to Fernando D. Sedano, a MAPI economic consultant based in Argentina.

In Mexico, sluggish growth in 2013 has been followed by an uptick this year, thanks especially to the automotive sector, Sedano says. The outlook in Mexico is rosier than Brazil, with pockets of growth in automotive, basic metals, and other areas spurring growth along the industrial supply chain, he adds.

Overall, MAPI forecasts Latin America’s factories to expand output by 2% in 2014 and a “still shy” 2.1% in 2015. The fastest-growing segments overall will be motor vehicles, computing and electronic equipment, basic metals, and other transport equipment, the group says.

Mouser has been unaffected by the economic challenges so far.

“Business conditions are challenging in all of the Latin American countries in different ways, but we don’t seem to be constrained right now by [those economic challenges],” explains Newland. “We’re picking up share in Latin America regardless of any economic tailwinds.”

The company also continues to make key investments in the region. Its Mexico location is now Mouser’s hub for Latin America, with about 10 employees who speak English and Spanish. A growing team of U.S.-based Portuguese speakers handles customer service for accounts in Brazil. In both countries, Mouser has honed its marketing efforts, increasing its print advertising and trade show presence and aggressively targeting paid online advertising campaigns. New and improved translation efforts in all its advertising programs have helped, too.

“That gives us a much stronger local feel,” Newland explains, pointing to Mouser’s efforts to initiate local marketing programs in all of its markets worldwide.

Salomao emphasizes the importance of such efforts.

“We are continually expanding our understanding of doing business in Latin America,” he says. “We’re using the right marketing materials. Our team is expanding in Mexico—we opened a larger office in Guadalajara—and there is tremendous potential to expand our team of Portuguese speakers here in the United States as well. All of these things are helping us continue to expand [throughout the region].”

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