Opportunities and Development in the Mexican Aerospace Industry

Mexico's aerospace industry has seen a notable increase in growth over the last five years. Mexican exports in this sector have grown significantly. In the last three years, investment in the aerospace industry surpassed three billion dollars, and it is estimated that, according to data from the Mexican Aerospace Industry Federation (Federación Mexicana de la Industria Aeroespacial or FEMIA), this year 800 million additional dollars will be added to this total. One of the explanations for this success is the link to low production costs in Mexico, which are estimated to be between 28 and 34 percent less than other countries with developed aerospace industries, including France and Brazil. The head of the Promotion, Investment and International Business Unit of Mexico's Business Promotion Agency (Promexico), Luis Olive, declared that in five years the aerospace parts industry will create 35,000 jobs, which is more jobs than those that currently exist in the sector. In Mexico there are more than 190 companies in the aerospace industry, the majority of which are foreign. These companies employ around 30,000 people and have generated more than three billion dollars in exports over the last year. Presently 80% of Mexican aerospace industry companies are dedicated to manufacturing items such as components, cables and harnesses, landing system parts, plastic injection molding parts, and precision machining, among others. Companies focusing on engineering, design and training represent 10% of aerospace industry companies. Companies dedicated to maintenance and repair operations (MRO) represent 10% of the total and are focused principally on the maintenance of engines and turbines, auxiliary power units, fuselages, electronic systems and landing systems. In accordance with a study conducted by the consulting firm AeroStrategy, with respect to investments between 1992 and 2008, of the fifty largest countries in the world, Mexico has attracted more investment in the area of aerospace manufacturing, passing countries such as China, Russia, the United States of America, India, Malaysia and Turkey. With respect to investments in creating research and development capacity, Mexico is in sixth place, following only Russia, India, the United States of America, the United Kingdom and China. The experience and success of Mexico in developing industry sectors, such as automotive and electronics, provide a platform of specialized methodologies and infrastructure that favors the development of the aerospace industry in Mexico. In addition, such permit the optimization of supply chains, mutual support programs and advantages of synergy. Currently, Mexico graduates close to 90,000 students in engineering and technology related to this sector. This represents a highly attractive contribution of talent to the aerospace sector. As mentioned above, Mexico is also a country with competitive operating costs in the aerospace industry. According to a study entitled "Competitive Alternatives 2008," conducted by KPMG, Mexico allowed for cost savings of 30% in comparison to other leading countries in the industry. The states of Chihuahua, Baja California and Queretaro have been the preferred destinations of the aerospace sector. According to experts, Baja California was selected by English manufacturers based on its proximity to California. Chihuahua also takes advantage of its border with the United States of America, and thus has seen executive aviation aircraft manufacturers develop an important network of suppliers. According to the data from the Office of Promotion and Economic Competitiveness of the State of Chihuahua, published in the newspaper Reforma, one of every four jobs that has been created in Chihuahua has been in this industry. In Queretaro, the Canadian company, Bombardier, has established a facility, and such state has also attracted Safran, General Electric, ITR and Eurocopter. According to data from the government of the state of Queretaro, companies in the aerospace sector have created 4,800 jobs and invested $650 million dollars.

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