Why this is important to Wisconsin businesses: With few domestic producers, Mexico relies on imports, and Wisconsin companies can help meet the demand.
Mexico is experiencing a high in demand for modern equipment and machinery that will help its booming manufacturing industry stay competitive and respond to increasing production of high-tech manufactured products. Different types of CNC machine tools, along with automation equipment and robotics, support greater efficiency in production, higher quality, lower production cycles, and reduced in costs. During the past two decades, the country has passed from a near-manual manufacturing process to a modern and complex production environment that requires high-tech machinery.
Mexico has become a manufacturing hub for high-tech manufactures, consumer electronics, home appliances and other products. As of 2016, the country places as the number-one worldwide exporter of refrigerators and flat-screen TVs; the second-leading exporter of air conditioning and water heating equipment; the third-leading exporter of washing machines and stoves; the fourth-leading exporter of personal computers, speakers and laptops; and an important exporter of other products, including vacuum cleaners, furnaces and fans, and even components such as microprocessors and semiconductors.
But the sector driving up the demand for high-tech machinery, automation, CNC machine tools and robotics is the automotive industry. As of 2016, Mexico was the world’s seventh-largest manufacturer of four-wheeled vehicles at 3.6 million units, a remarkable increase for a country that produced less than half of that figure ten years ago (just 1.7 million vehicles in 2005). The automotive industry (including original equipment manufacturers and suppliers) is known for aggressively automating its manufacturing processes, and Mexico is currently experiencing this trend across the major brands that manufacture in the country (VW, Toyota, GE, Nissan, Ford, Honda, Volvo Trucks, Scania, Isuzu, Kenworth) and also across the tier 1 manufacturers supplying the OEM companies, such as Delphi, Johnson Controls, Clarions, Rassini and Nemak, and even tier 2 and 3 producers. It is expected that by 2020, the country will manufacture 5 million motor vehicles a year, surpassing South Korea and moving up one spot as the world’s sixth-largest manufacturer.
But unfortunately, this manufacturing boom requiring high-tech machinery in the automotive and other industries has not been matched by a corresponding increase in domestic production of equipment to support such growth. The domestic production of high-tech machinery such as CNC machine tools, robotics and automation equipment is still quite low, forcing manufacturers to turn to imports. In the specific case of machine tools (including CNC machines), Mexico became the fourth-largest importer of this type of equipment by the end of 2014, importing more than $2 billion worth—a 12 percent increase over the previous year. Imports of machine tools have risen by double-digit figures for the past 10 years, and by 2016 the country was the fifth-largest market globally for these types of machines.
Mexico does not have domestic production of machine tools and CNC equipment sufficient to meet the increasing demand. Domestic companies manufacturing CNC machinery, such as Bimex, are scarce, forcing companies that seek to buy such equipment to look for imports. Furthermore, during the Expomaq 2016 trade show, out of 195 exhibiting companies, there was reportedly not a single Mexican company.
In addition, since Mexico’s manufacturing expansion has been under way for more than 20 years, many firms need to upgrade their machinery and equipment, further opening doors for foreign manufacturers and products.