Mexico - an investment from the ground up

Wednesday, June 6, 2012

This is the Group's latest big investment: since March 1st the new geographical hub for Mexico has been in operation.

An investment that breaks with traditional strategy for internationalization used until today, as the operation does not begin with the acquisition of a local company, as per usual, but, rather, is being built from the ground up.

“Volvo has already made three attempts to position itself in Mexico, but all failed”, explains Ricardo Mieiro, Chairman of Ascendum Group's Executive Board, emphasizing that this was not enough to deter the Portuguese Group from becoming the only distributor of the brand in a complicated market, but paves the way for clear opportunities for success. In addition to the invitation made by Volvo Construction Equipment representing yet another undeniable vote of confidence in the Portuguese company's capabilities, the challenge faced in Mexican territory is of “epic proportions”, because it involves building a business from scratch in a market with very specific characteristics, starting with a complex financial system, and in which Volvo has never managed to gain more than a 4% market share.

Per the terms of the agreement signed with Volvo, Ascendum will have to create 14 Business Units across the country by 2014, which means that the operation is only expected to be somewhat stable then.

Despite the size and complexity of the challenge, Ricardo Mieiro is confident that his team will be able to do in Mexico that which has already been done in Spain, in the United States or in Turkey. In other words, increase market share and the quality of service provided by Volvo in these geographies.

In the first 30 days of activity, around 50 workers were hired, equipment was acquired and construction began on the site, all under the supervision of the CEO of the new company, Marco Liz, a Mexican with a deep-rooted Spanish culture, aided by an exceptional management team.