Growth and Opportunity Areas in the Mexican Aerospace SectorWed, 11/08/2017 - 12:05
While projecting its total investment in Mexico, Bombardier never thought it would find such qualified labor in the country and the conditions for a prolific industry, Carlos Robles, President of the Mexican Federation for the Aerospace Industry (FEMIA) and Vice President of Bombardier Queretaro, said on Wednesday at the Mexico Aerospace Forum 2017 at the Sheraton Maria Isabel Hotel in Mexico City.
With 312 registered industrial facilities and close to 50,000 jobs created to date, the aerospace sector is one of the fastest growing in the country. According to Robles, aerospace has enjoyed an average annual growth of over 15 percent between 2004 and 2016. “Even though 100 percent of the aerospace companies focused on manufacturing 10 years ago, today 11 percent of the companies have MRO operations and 9 percent focus on design and engineering.”
Robles mentioned that Mexico is among the top destinations for FDI in the global industry with approximately US$33 billion. For 2017, he expects the industry to represent 60,000 jobs nationally and US$8 billion worth of exports, accounting for a 23 percent trade surplus.
National clusters such as Queretaro are already competing at a global level and Queretaro is now the fourth most important cluster in the global aerospace industry. However, the local production chain still has enormous opportunities to develop its Tier 2 and Tier 3 segments. “Approximately 90 percent of all Bombardier electric harnesses are manufactured in Queretaro,” said Robles. “Yet, these products have almost no Mexican content.”
FEMIA is already addressing the issue, helping local companies break into the productive chain. The association helps companies strengthen operations through trainings and certifications to later pair them up with larger providers and OEMs. “To date, we have arranged over 150 pairings between 55 suppliers and 23 buyers, representing over US$350 million,” says Robles.
Taking advantage of the opportunities in the supply chain is easy, according to Robles, and the sector’s growth will only make this process easier. In 2016, the country moved up the international trade ladder to become the sixth main exporter to the US, up from 10th previously. The US represents 79 percent of Mexico’s total exports, followed by Canada with 7 percent. “Mexico has a significant dependence on the US but that country also relies heavily on Mexican production,” he said. In terms of imports, the US accounts for 73 percent of the national industry’s supply, while France occupies second place with 8 percent of national imports.
Overall, Mexico is ranked 14th in the global aerospace industry and the goal for 2020, according to Robles, is to move up four positions and become the 10th most important aerospace hub in the world. “The industry’s development and the new investments will take us to total exports of US$12 billion and 110,000 jobs,” he said. “Moreover, our goal is to evolve beyond a mere low-cost manufacturing site and increase Mexican added value in manufacturing to 50 percent.”