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Mexico’s aerospace industry has become an important motor driving investment in the country. The industry has seen a 15% growth in the past decade and generates close to $10 billion in exports. Mexico has become an attractive destination for aerospace foreign direct investment (FDI) given its increasingly skilled workforce with quality engineering talent and low manufacturing costs.
The states of Sonora, Baja California, Chihuahua, Nuevo León, and Querétaro have especially been attractive aerospace FDI destinations, which has led them to develop robust clusters that strengthen the internal market, facilitate investments, and expedite processes with direct contact with buyers, suppliers, government officials, and leading universities.
Mexico’s aerospace sector grew from 100 manufacturing firms and organizations in 2004 to 360 by 2019. Today these firms primarily include maintenance-repair-overhaul facilities (MROs), technical schools, research centers, universities, and related service providers. The Mexican Aerospace Industry Federation (FEMIA) states that 72.2% of all firms are manufacturers, 13.2% focus on design and engineering, 11.2% are in MRO services, and 3.4% encompass other support entities. It is estimated that 48% of investment in the industry comes from the United States, while 36% is from Canada.
The sector is divided into original equipment manufacturers (OEMs, producing final aircraft), followed by companies involved in Tier 1 production (principal aircraft systems), Tier 2 (producers of sub-assemblies), and Tier 3 (parts and supplies). In contrast with the United States, the Mexican aerospace industry focuses on aerospace parts and assemblies that are integrated into final systems.
Aerospace manufacturing has benefitted from the strength and vast reach of Mexico’s automotive sector. Companies have had the confidence of expanding in Mexico given the country’s workforce technical skills, vast infrastructure connectivity, fiscal benefits, and country’s free trade agreements with 52 countries (more than 60% of the world's GDP).
There is a unique opportunity for growth investment in Mexico's aerospace industry to consolidate value chains. Within the supply chain, only between 5-6% of its composition is of national origin, while the goal is to raise it to 50-60%, comparable to the integration levels of the automotive industry. The opportunities expand to over 20 supply areas, including machining, foundry, plastics, among others.
Given the ongoing trade wars, global supply chain shocks, and ongoing pandemic, Mexico presents greater certainty for investors - and Nexus is here to help them succeed.
With Nexus, manufacturers comply with international safety and process standards, an IMMEX certification, and skilled workforce. Additionally, companies are able to work with Nexus’s team of experts to make their processes more efficient with the latest software and hardware technologies, as well as energy solutions that reduce utilities costs up to 50%.
With information from the International Trade Administration
