Mexico Bound: Aerospace Industry Growth
By Luisa Piñón | Chihuahua Business Development at American Industries Group®
Amidst the global aerospace industry’s recovery from the impacts of the pandemic, Mexico is emerging as a pivotal player in the sector's resurgence. After significant setbacks, including production cuts and diminished air travel, the industry is now witnessing a return to pre-pandemic activity levels. In this dynamic context, Mexico is stepping up as a key contributor, helping aerospace companies meet the escalating demand and maintain competitiveness in a rapidly evolving market. This article will examine the driving forces behind Mexico's growing influence in the aerospace industry, highlighting the country's strategic initiatives, advanced industrial capabilities, and specialized regional contributions. Additionally, we'll explore how collaborations with American Industries can enhance business success and capitalize on the opportunities Mexico offers.
Mexico’s Aerospace Industry: A Hub of Innovation and Investment Growth
Mexico’s aerospace business is undergoing a significant growth phase, bolstered by increased foreign direct investment and strategic advantages. Here are some of the main benefits that underscore this expansion:
- Rising Foreign Direct Investment: In the first half of 2023, the sector attracted US$156 million in FDI, a 4.7% increase compared to US$149 million during the same period in the previous year. This trend is the culmination of a cumulative FDI of US$4 billion in aerospace equipment manufacturing from January 1999 to June 2023.
- Global Confidence in Mexico's Aerospace Production: This robust investment reflects the growing trust of the international aerospace community in Mexico's high-tech manufacturing, intricate design capabilities, and comprehensive maintenance services.
- Adaptive and Dynamic Industry Strategy: Mexico’s aerospace sector is expanding in production and showing remarkable agility in adapting to global market shifts, supported by a strong network of suppliers and a well-developed industrial ecosystem.
- Strategic Geographic Location: Mexico's proximity to major aerospace markets and its capacity to manage complex logistics and supply chains make it an ideal partner for the global aerospace business.
- Innovation and R&D: The country’s focus on research and development drives continual innovation in the aerospace industry.
- Skilled Aerospace Workforce: Mexico’s highly trained and specialized workforce is vital to its growing reputation for aerospace excellence.
- Supply Chain and Regional Specialization: Mexico's supply chain capacities and specialized regions contribute to the robustness of its aerospace ecosystem.
- Cost Efficiency and Reliability: Nearshoring to Mexico provides more cost-effective production and reliable supply chain structures.
Mexico Aerospace Manufacturing: OEMs, Supply Chains, and Regional Hubs
Another factor in the growth of the aerospace industry in Mexico is the global nearshoring trend. This shift toward more agile and resilient supply chains increasingly attracts aerospace companies to the country. Several key factors contributing to this include:
- Presence of Major OEMs: Leading Original Equipment Manufacturers (OEMs) such as Bombardier, Safran Group, and Zodiac Aerospace have established substantial operations in Mexico. The merged entities of Safran Group and Zodiac Aerospace notably operate nine facilities nationwide, demonstrating the country's integral role in aerospace manufacturing.
- Strategic Partnerships: Major OEMs like Bombardier, a renowned Canadian company, rely heavily on Mexican suppliers for crucial aerospace components. For instance, a significant portion of its sheet metal aerostructural parts are sourced from Mexico, underlining the strategic importance of aerospace companies in Mexico.
- Complex Supply Chain System: The aerospace industry in Mexico features a sophisticated, multi-tiered supply chain. Tier 1 suppliers deliver integrated systems for final assemblies, while Tier 2 and 3 suppliers provide essential sub-systems and components. This intricate structure highlights the interdependence and complexity of Mexico aerospace manufacturing.
Capitalizing on Aerospace Manufacturing Opportunities in Mexico
Mexico's aerospace sector is flourishing, with regions like Queretaro, Chihuahua, Nuevo Leon, and Sonora leading the way as dynamic hubs of innovation and growth. These areas, are renowned for their clusters of aerospace companies, advanced training facilities, and research centers. They contribute significantly to the national economy and Mexico's global standing in aerospace, particularly in design, manufacturing, and maintenance services.
A testament to this growth is the success story of Metal Finishing Company (MFCo). Established in 1940 in Wichita, Kansas, MFCo expanded into Mexico, attracted by the competitive labor costs and growth opportunities. Their partnership with American Industries Group was pivotal, streamlining their transition into the Mexican market. Today, MFCo's operations in Chihuahua demonstrate the success possible in Mexico’s aerospace sector.
American Industries plays a crucial role in supporting the growth of manufacturing companies in Mexico. Our administrative support services and real estate services are key in guiding international companies through the complexities of establishing operations in Mexico. We offer tailored services to meet the unique needs of each client, including comprehensive administrative support to ensure a smooth transition into the Mexican manufacturing sector.
Our problem-solving approach, combined with our expertise and client-centric focus, effectively addresses challenges such as local regulations, cultural differences, and efficient operation setup. Our shelter partnership simplifies the process, making it easier for companies to establish a strong manufacturing presence in Mexico.
Furthermore, through its shelter program, American Industries provides ongoing support in areas like HR, accounting, customs, logistics, and safety, allowing companies to focus on their manufacturing while we manage administrative tasks. Our comprehensive services position Mexico as a more efficient, expert, and convenient manufacturing destination compared to others like China.
Taking Flight: Mexico's Aerospace Journey and Future Opportunities
Mexico's aerospace industry is rapidly ascending in the global economic arena, marked by substantial growth and transformation. Catalysts of this expansion include the significant rise in foreign direct investment. Emphasizing Mexico's ability to cater to the needs of international aerospace giants, it highlights the country's skilled workforce and strategic location.
Mexico's intricate supply chain, regional expertise, and the advantages of forming local partnerships, particularly with American Industries, make it ideal for expanding or relocating for aerospace companies. The success stories of American Industries’ many aerospace clients are a testament to the innovation and growth achievable in Mexico's aerospace sector. If you want to discover how your company can leverage opportunities, reach out today to find out how American Industries can facilitate success and growth in this dynamic industry.
If you would like to find out more about this topic or are interested in receiving a complimentary business case analysis for your operation in Mexico, please fill out this form or contact us at:
US toll-free: +1 (877) 698 3905
Attention hours from M to F 9:00 - 18:00 CST