Carlos Mortera
International Director Latin America
AMT
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View from the Top

Mexico: One of the Leaders in Manufacturing Equipment Sales

By Sofía Garduño | Mon, 08/15/2022 - 14:27

Q: What are AMT's expectations for the renewal of its memorandum of understanding with the National Auto Parts Industry (INA)? 

A: The automotive industry is one of the world’s most important consumers of manufacturing technologies. AMT represents 85 percent of the key manufacturers of manufacturing technologies sourcing into Mexico, such as robots, machine tools, automation, metrology and AI. Out of that 85 percent, the global automotive industry consumes between 40-50 percent. For that reason, it was essential for us to engage with the automotive and auto parts industries to ensure that their needs were well addressed and their expectations were well understood.

We help automotive companies enhance best practices in two ways. The first is “hard manufacturing,” in which we help clients understand the latest manufacturing technologies and how they can be implemented at plants to improve productivity or reduce costs. The second pertains to soft skills. In the Americas, most Tier 1, Tier 2 and auto parts companies struggle to find qualified technicians, which is why we launched the “Tooling you” initiative that will allow us to improve soft and hard skills through our e-learning platform that offers over 500 courses in Spanish, out of the overall catalog of 1,000.

Q: How are your members benefiting from the USMCA and what business opportunities have arisen from nearshoring trends?

A: AMT members are manufacturing technology producers, including companies like Mazak and MachineMetrics, software developers like Mastercam and machine tools or welding systems manufacturers like Lincoln Electric. We also have many robotics companies, including ABB. The USMCA offers a large opportunity for manufacturers that supply to the OEM and aftermarket segments and to electronics, aerospace and medical devices manufacturers. The expectation is that demand will grow mostly because of the USMCA’s rules of origin regarding content. Companies already installed in Mexico that need to meet that content rule will likely expand their manufacturing process. Our members can reach out to us to understand what are the best alternatives to incorporate new technologies and processes.

Reshoring started 14 years ago after a tsunami in Japan disrupted global supply chains but really kicked off in 2016 following the trade war between China and the US. This latter problem made it almost impossible for some companies in North America to use traditional sources. The COVID-19 pandemic increased costs, making traditional suppliers a nonviable alternative for many companies and triggering the nearshoring phenomenon. Companies from the US, Germany, Japan and other countries are trying to take advantage of nearshoring. About 50 percent of projects that are being relocated are moving to Mexico.

Q: How has Mexico performed in terms of manufacturing equipment sales when compared to other countries in Latin America?

A: This year, consumption of manufacturing technologies in Latin America will surpass US$10 billion, an extremely large amount. Mexico and Brazil are two key players in the region but Mexico is still the strongest. From 2012 to 2022, Mexico has consumed above US$2 billion worth of a key segment Machine Tools per year, which involves heavy material use and human resources.

Q: How is Mexico advancing toward an Industry 5.0 transformation in the automotive sector?

A: The difference between Industry 4.0 and 5.0 pertains to the circular economy and eco-friendliness. Numerous efforts have been made in the automotive industry to meet the 2030 carbon emission goals. Many of our members are working with auto parts companies to help them incorporate intelligent applications and systems. Our members are implementing solutions that have been well accepted by some of the larger OEMs and Tier 1s, which are really environmentally conscious.

Q: To what degree does ATM work with governments?

A: Depending on the maturity of a country’s industrial policies, we have to interact more with government officials and agencies to help them understand the importance of investing in manufacturing. For every dollar invested in manufacturing, three more are given back to the economy. It is the industry that produces the most revenue. In the US, we rarely get involved with industrial policy because the country has a manufacturing mandate that explains why manufacturing is essential for national security and the creation of wealth. However, in other countries, we have to collaborate directly with different governments. 

Q: What are AMT’s goals for 2022 in Latin America?

A: We have a master plan to support and add value to our members. We want to grow our membership. The more members we have, the more we represent technology and industrial communities around the world. Our membership has been growing steadily. In 2020, we had 650 members and currently we have 735. By 2025, we aim to reach 1,000. Mexico is the most active region; every day we are working on seventy different initiatives for seventy different companies. Our goals are aggressive but we have the right talent to achieve them.

The upcoming IMTS 2022 event is among our short-term goals. It will take place in Chicago on Sept. 12-17, 2022. At this event we will host a Latin American night for our visitors from this region, scheduled to take place on Sept. 14, 2022 starting at 5:00 PM at McCormick Place. This is a major networking event where we traditionally receive around 250 to 300 visitors at the reception the first in his kind organized during IMTS

Sofía Garduño Sofía Garduño Journalist & Industry Analyst