Mexican Aerospace Industry Under Pressure in the U.S. Market

The Mexican aerospace industry has begun to lose momentum after years of double-digit growth, This is due to uncertainty surrounding the U.S. market—which has become the primary destination for its exports—as well as the review of the USMCA, which is causing the industry to scale back its expectations for this year and seek support from the Ministry of Economy (SE) to prevent the slowdown from worsening.

The Mexican Aerospace Industry Federation (FEMIA) has estimated that the sector will grow by 8% this year. Nearly 80% of Mexican aerospace exports are destined for the United States, which is why trade conditions between the two countries have become one of the most significant sources of uncertainty for companies.

“We hope it continues to grow. Perhaps not at the same pace as in the past (…). I think growth will be a little more moderate while the issue of the treaty revision is being resolved. I don’t think we’ll reach double digits,” says Luis Lizcano, president of FEMIA.

The new situation means that the industry must seek alternatives to bolster its growth in Mexico, such as involving domestic companies in supply chains.

The Mexican supply chain accounts for more than one-third of the aerospace industry in Mexico, compared with less than 5% a few decades ago. The current challenge is to bring more companies on board; however, the process requires investments that not all companies are willing to make readily.