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Manufacturing Technology Insights | Sunday, July 31, 2022
In recent years, Mexico has seen an explosion of advanced manufacturing across various business segments.
FREMONT, CA: Advanced manufacturing, or AM, refers to utilizing cutting-edge technologies to produce both existing and novel products. This can encompass a range of production activities that rely on information, automation, computation, software, sensing, and networking.
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With a staggering 34 percent of manufacturing in the automotive industry being classified as "advanced," it's clear that this sector was one of the earliest adopters of AM. The COVID-19 pandemic has expedited the shift toward AM due to the exposure of significant vulnerabilities in supply chains and the risks associated with relying solely on human labor. The increasing demand for automation, robotization, interconnectivity, and systemization of industrial processes has opened up numerous opportunities for businesses in the United States operating in this sector.
The United States has a promising chance to export its AM technologies to Mexico, particularly in eight key sectors. These sectors include automotive production, heavy truck production, automotive parts, appliances, medical devices, pharmaceuticals, electronics, and the food and beverage industry.
Mexico's trade deficit with the world in robots and sensors has been a persistent issue, with a total of USD 30 million in recent years. This has resulted in Mexican firms relying heavily on imports, which amounted to USD 157 million, to leverage these advanced technologies. The United States contributed around 10 percent of the total, suggesting potential for expansion.
Robots: In 2021, Mexico imported industrial robots valuing USD 136 million. It is important to note that this figure does not include the cost of software, auxiliary equipment, or engineering services. The primary sources of robotic technology in Mexico are Japan, South Korea, the United States, China, and Germany, listed in descending order of supply.
Sensors: In 2021, Mexico procured sensors (HS 9025.19) valued at USD 33 million, with approximately 50 percent of the imports originating from China—the automotive and aerospace industries imported around USD 12 million worth of the total amount. In Mexico, the competition for securing the most significant automation contracts is fierce and typically involves prominent, globally recognized companies. Although small- or medium-sized projects may not interest larger companies, they can provide opportunities for U.S. firms that are interested.
Mexican businesses, regardless of their scale or capabilities, are increasingly adopting or considering the adoption of AM technologies. They are actively seeking turn-key solutions and expert guidance to conceptualize automated processes that can enhance their ability to meet customer demands.
Despite the fact that buyers in Mexico have a strong preference for American-made products, many companies in the United States have yet to capitalize on the growing interest in AM in Mexico. Meetings with suppliers are crucial in establishing connections with reliable and trustworthy buyers. These meetings are considered strategic and are highly valued in the business world.
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