Region/Countries: Mexico, North America Industry: Manufacturing, Other Date: May 2019

Why this is important to Wisconsin businesses: Growth in the automotive sector is driving demand, and the country is reliant on imports to meet the gap in domestic production.

Mexico is well behind the rest of industrially developed nations in the manufacturing of industrial molds, dies and tooling. Given this gap in production, Mexico offers tremendous potential for foreign mold manufacturers, since there is also high demand. It is estimated that as of 2018, Mexico manufactures only between 5% and 10% of its domestic demand for industrial molds, which is driven by continuous expansion of industrial sectors including home appliances, consumer electronics, plastics, construction and especially the automotive industry. Demand for industrial molds shows no sign of slowing down, registering double-digit growth rates year over year. Between 2012 and 2015, demand for industrial molds increased between 30% and 40% in volume.

As of 2018, up to 86% of Mexico’s imports of molds were for use in two sectors, automotive (over half of the total) and plastics. With its demand for high-tech machinery, molds, dies, automation, CNC machine tools and robotics, the automotive industry is driving overall growth in demand. As of 2018, Mexico is the world’s sixth-largest manufacturer of four-wheeled vehicles, making just over 4.1 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). Major brands manufacturing in the country include Volkswagen, Toyota, GE, Nissan, Ford, Honda, Volvo Trucks, Scania, Isuzu and Kenworth, but also tier 1 manufacturers supplying OEMs, such as Delphi, Johnson Controls, Clarions, Rassini and Nemak—and even tier 2 and 3 producers. It is expected that by 2020, Mexico will manufacture 5 million motored vehicles a year, surpassing South Korea and matching production figures with Germany.

The explosive growth of the automotive industry, paired with growth of other important industrial divisions (such as electronics and aeronautics), is considered a missed opportunity for Mexican metal industrialists who could be meeting the demand for molds. Very recent efforts of domestic entrepreneurs to correct this situation include the creation of the Mexican Association of Molds, Dies and Tooling (AMMMT) in 2014 to promote technological and commercial development of molds in the country; the Mexican secretary of the economy’s launch of the Program to Promote Mold, Die and Tooling Manufacturing (Programa de Impulso de la Manufactura de Moldes, Troqueles y Herramentales) supported by AMMMT and the Supply Chain Association of Mexico (CAPIM) in 2016; and finally, the first specialized publication for industry molds in Mexico, El Moldero, launched in February 2018 and supported by the monthly publications Modern Machine Shop Mexico and Plastics Technology Mexico. All of these very recent developments are expected to yield tangible benefits by 2030. Education and training are additional important factors in building a domestic mold industry, and a number of technical institutions and universities across the country have opened specialized education and training programs to enhance the skills of technical staff in the manufacturing, maintenance and repair of molds.

Mexico currently suffers from a serious lack of specialists and engineers int his area, as well as other highly trained professionals such as design engineers, CNC programmers, manufacturing engineers, software engineers and other trained technicians to meet domestic demand in the mold industry. It is expected that efforts within Mexico to increase domestic mold production will take into account issues such as quality certifications (ISO 9000 and others) and the USMCA trade agreement, which demands production increases in the national content of manufactured goods and emerging technologies such as 3D printing—which stands to dramatically reduce the cost of mold manufacturing.

In summary, production of industrial molds in Mexico is extremely low, and the expansion of industrial sectors (especially automotive) will keep increasing demand for the foreseeable future. Mexico’s recent efforts to grow domestic mold production will yield results only in the long run, so the present situation offers exceptional opportunities for exporters.