Mexico Aviation & Aerospace Review - 2016/2017

Publisher: Mexico Business Publishing
Category: Business
Language: English
Frequency : Yearly

Over the last decade, American and European aerospace OEMs and suppliers have sought new destinations that offered competitive labor costs and promising R&D potential. It is now clear that Mexico is their country of choice. Exports from the aerospace industry have grown at an average 20.6 percent annual rate over the past five years. With 300 aerospace companies within its borders, Mexico is 14th on the list of global aerospace suppliers but it intends to crack the top 10 by 2020. The coming years will be crucial for the Mexican aerospace industry as it heads toward that ambitious target. Exports from the industry are forecast to surpass US$7.5 billion, 52,000 total direct jobs are expected and the national content in components is set to reach 30 percent. Exports from the industry are forecast to surpass US$7.5 billion, 52,000 total direct jobs are expected and the national content in components is set to reach 30 percent. Although Mexico first rose to prominence as an aerospace investment destination due to its geographical and manufacturing advantages, it is rapidly gaining attention for its R&D and engineering potential. Thanks to the “triple helix” alliance between government, companies and academia, a number of universities offer targeted aerospace engineering courses that will provide the sector with a steady stream of talent, ideas and technologies.

Having thrived on the ground, Mexico is reaching for the skies. Exploiting a strong manufacturing base developed in tandem with the auto sector, the country is halfway to its goal of being a vital player in the aerospace industry by 2020. Several factors are working to Mexico’s advantage, including its numerous free trade agreements, quality workforce and a prime location that makes it a gateway to the US and Latin America. Although the high dollar-peso exchange rate has hobbled certain segments, it also has helped OEMs here to optimize manufacturing costs. Still, after five years of unparalleled global growth, the industry appears to be losing some of its steam. Analysts say the slowdown that marked 2016 is a sign of deceleration rather than decline and that for Mexico at least, a little bad news is good news.


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