Promoting Mexico at Home and Abroad

Q: What opportunities does aerospace bring and how is ProMéxico supporting its development?

A: The aerospace sector generates great possibilities for Mexico and the country can use its strong experience in the automotive industry to capitalize on these new opportunities. The local aerospace industry has benefited from the existing infrastructure and human capital.

ProMéxico is working closely with the Ministry of Economy to implement the Pro-Aéreo program through three ventures. The first is to bring anchor companies to Mexico, namely OEMs and Tier 1 businesses that will interest aerospace suppliers. The second venture aims to attract suppliers that can cater to companies already operating in Mexico and the third is to establish MROs. These efforts are undertaken both locally and internationally.

Globally, ProMéxico promotes Mexico’s different industries to investors and within our borders we help strengthen companies already established here, such as UTC, Honeywell, Safran and Bombardier.

Q: What allowed Mexico to enter the aerospace global value chain and differentiate itself from other countries in Latin America?

A: NAFTA and other trade agreements helped Mexico position itself as a commercial powerhouse by significantly opening borders and simplifying commerce. This made the country an attractive destination for parts manufacturing. But the ease with which these can be exported limits any interest in completing the supply chain. Brazil, on the other hand, has limited trade policies and thus had to invest more heavily in the development of an entire internal supply chain for the construction of Embraer. As part of NAFTA, Mexico entered the global supply chain, allowing it to become a top aerospace parts supplier for the US but there is still room for growth.

Q: How feasible is it to increase exports to other locations apart from the US?

A: This issue is not exclusive for the aerospace sector. It will be beneficial for the country to diversify its exports in every economic area. According to global trends, the US will continue to grow its aerospace industry as the country has the largest fleet in the world and a large number of aircraft will have to be replaced.

Asia is increasingly becoming a major player as aircraft demand in the region will only keep rising. For that reason, it would be convenient for Mexico to capitalize on its aerospace industry. The country must create more alliances with companies all over the world, especially with Asia. We are already working with Asian investors such as Singapore Technologies, which is interested in developing MROs in Mexico.

Q: How aware is the foreign community of Mexico’s aerospace capabilities and how is ProMéxico promoting them?

A: Being present at aerospace events has helped enormously to promote Mexico’s aerospace competencies at a global level. Our objective is to make all industries in the world aware of Mexico’s capabilities. These events also are helping state governments reach multinational companies to propose collaborations. We are planning to attend several aerospace events, Mexican and otherwise, in 2017 including Mexican Aerospace Fair (FAMEX), Aviation Week MRO Latin America and the International Paris Air Show.

There is an increasing awareness of Mexico’s capabilities in foreign countries. For instance, recently we had a conversation with a foreign representative who showed interest in opening an MRO in Mexico, noting that is where the company best workers come from. The biggest challenge for operating an MRO is hiring qualified professionals and Mexico can train enough of them to service the industry properly.

Mexico may still have an undeserved negative image but foreign companies are well aware of the country’s potential, capabilities and positive business environment. The country is at its highest competitive point. For the aerospace industry, this translated to exports of US$6.6 billion dollars in 2015.

We are the safest country for investment in Latin America and the country increasingly is attracting potential investors. In light of Brazil’s political instability, many investors are turning to Mexico as the base for NAFTA and an entry point for many other potential markets. Mexico is becoming the first destination for foreign manufacturers in Latin America.

Q: How important is the aerospace industry for Mexico in comparison to other economic sectors?

A:. The aerospace industry grew fivefold between 2005 and 2014. While it is not as large as the automotive sector, it has significant potential for growth due to the number of aircraft that will be needed in the coming years. Mexico is well on its way to cover Pro-Aéreo’s goals, as the country has over 330 aerospace companies, of which 72 percent are dedicated to manufacturing, 10 percent to maintenance services and the rest to other services. It also has significant potential to develop other areas of expertise, such as MROs, thanks to its closeness to the US. Mexico has room for several more MROs as existing workshops are either saturated or belong to an airline and only provide maintenance to that fleet.