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Mexican Aerospace Industry to Ride Momentum Wave

Mexico has made impressive strides in the aerospace sector over the last decade and is poised for more growth this year, but major industry players believe the companies in the country should start focusing more on innovative technologies.

“Is it a fully mature market? It is getting there, but what we see here now are Tier 2 and Tier 3 suppliers,” said Joe Marcheschi, Airbus Americas Head of Strategic Procurement Support, at a discussion on the future of the aerospace industry in Mexico, which was held on the opening day of Mexico’s Aerospace Summit at Queretaro, Mexico. “We would love to see a homegrown Mexican Tier 1 supplier. Make it more attractive for us to come down here.”’

The industry has a lot of potential but needs to mature more, said Marcheschi. “We need suppliers to be innovative, to come to us with innovative solutions. We are looking for high-performance suppliers. Airbus has 12,000 global suppliers. Mexico is competitive in terms of labor, but a lot of countries have rates as competitive as Mexico.”

“Donna Hrinak, Boeing Latin America President, agreed with Marcheschi’s view. “Where is the Mexican company that Horizon X (a Boeing initiative that supports startups that focus on disruptive technologies) is going to invest in? That level of innovation is what I am looking for in Mexico. It doesn’t need to be a product.”’

The time is not far away when Mexico will have a mature Tier supplier, said Carlos Robles, Bombardier Aerospace Mexico Vice President and president of the Board of the Mexican Federation for the Aerospace Industry (FEMIA). “It is almost there; there is a good initiative in the Queretaro cluster that I am excited about. Probably next year; I am optimistic.”

Having a supply chain that understands the needs of the industry is important, said Robles. The Aeronautical University in Queretaro (UNAQ) is a great partner not just for Bombardier but for any other companies in the region. “This is a model that many other countries are trying to copy.”

The three industry leaders also dwelled on why Mexico has been able to sustain its speedy growth in the aerospace field. An educated workforce, geo-strategic location and the competitive cost of labor are only some of the reasons for the country’s progress in the sector, they added.

Bright future forecast

The Mexican aerospace industry grew at an annual rate of 14 percent from 2004 to 2017 and is expected to continue growing at the same, if not faster, pace in 2018 and beyond, said Luis Lizcano, FEMIA Managing Director, said. In just 10 years, the country jumped from tenth on the list of top exporting countries to the U.S., to sixth, he added.

There are as many as 312 industrial facilities in the sector in the country, with 80 percent of them involved in manufacturing, 11 percent in MRO and the rest in engineering and design. The industry has so far generated about 54,000 jobs, besides US$13,000 million in foreign direct investment.

The number of jobs in the industry is expected to increase to about 59,000 in 2018, Lizcano said. While the number of industrial facilities is expected to go up to 340, exports, which amounted to US$7,649 million in 2107, will likely hover around US$8,600 million. The goal for 2020 is to have exports go up to US$12,000 million and jobs to touch 110,000, he added.

The event was inaugurated by Queretaro Governor Francisco Domínguez Servien. Speaking on the occasion, he said that Queretaro is now the fourth destination of aeronautical investment in the world. Financial Times recently named Queretaro among the 10 aerospace cities of the future worldwide, he added.

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