The Decline of the Mexican Toy Industry: Challenges and Opportunities

Mexican toys have been relegated. Fewer and fewer of them are arriving on Christmas trees as gifts, as fewer are produced and exported, said Arturo Ortiz Wadgymar, a researcher at UNAM's Economic Research Institute.

Even though most of these things are made and sold from December to January 6, the demand for them has been going down because of imports from Asia, especially China.

According to reports from the National Institute of Statistics and Geography (INEGI), the production of this industry has decreased; exports went from approximately 1.2 billion dollars in 2016 to 1 billion dollars in 2018, and it has registered a trade deficit (imports greater than exports) for several years. In 2018 alone, it was US$672 million.

Most imports are consoles and video games, sets or building blocks, toys with animals or people on them, dolls and dolls with people that are 30 centimeters or less tall and wearing clothes, and other things.

These items come from China (80.2 percent), the United States (6.6 percent), Vietnam (1.7 percent), Hungary (1.6 percent), and Denmark (1.2 percent), according to INEGI's study "Knowing the Toy Industry," published in 2020.

Given this, a specialist in Mexico's foreign trade recommends developing an industrial policy that focuses on manufacturing products that are currently imported from China rather than promoting traditional toys.

"We have engineers and a fundamental technology with which we can replace imports, for example, of video games and high-tech products." "The video toy industry, which is practically nonexistent, must be supported," he said.

With the signing of the trade agreement between Mexico, the United States, and Canada (T-MEC), it would also be possible to encourage investments and production that Mexico's partners make in China to move progressively to Mexican territory, which would greatly reduce their transportation costs.

The Mexican toy industry hasn't grown in a long time for several reasons. One is that technology is changing quickly, making many toys made of plastic, wood, and other materials obsolete. Another is that different treaties have opened up trade, making it hard for manufacturers to compete.

The Mexican toy was left with ideas from the previous century: it is no longer played with; it is not used; rather, it is for collection, and it is handmade.

"It is in this season when the Mexican toy goes out to the markets, as part of the great opportunity for sale that there is." "Afterwards, the producers dedicate themselves to other articles that they offer according to dates and fashions," said the researcher.

INEGI's study, "Knowing the Toy Industry," also points out that its manufacture in the country is concentrated in 27 medium and large companies; employment levels have remained stable in recent years; and the inputs used for production are 46.7 percent domestic and 53.3 percent imported.

It also indicates that toy exports are mainly to the United States (88.2 percent), followed by the Czech Republic (2.1 percent), China (1.1 percent), Canada (0.8 percent), France, and the United Kingdom (0.7 percent each), and the rest of the countries (5.7 percent).

For researcher Arturo Ortiz Wadgymar, Christmas and the entire holiday season are a good time to boost campaigns and promote Mexican toys, as well as all products made in the country.

"As in the United States, where America comes first," he suggested Mexican families give the gift of a toy made in our territory and/or handmade, which in most cases is fun and develops the ingenuity of girls and boys.