Whitepaper Mexico: The Boom of the Automotive Industry Drives the Die-Casting Market
Mexico is the seventh-largest car manufacturer in the world and the fourth-largest car exporter behind Germany, Japan and South Korea. Of course, this growth is also paying off for the die casters in Central America
Recent studies suggest that in the long term Mexico will develop into a hub for the world-wide export of automobiles. Almost all renowned manufacturers of automobiles and automotive parts operate production plants in Mexico. In 2017 more than 350 Tier 1 suppliers have had facilities in Mexico. When reading the map of Mexico, clear tendencies of their locations can be observed. While engine parts are mainly produced in the middle of the country, the focus of the production of interior parts shifts northwards. Light vehicle manufacturing plants are nearly spread all over the country.
The Automotive Industry
The Mexican automobile manufacturers association AMIA (Asociación Mexicana de la Industria Automotriz) expects that Mexico will produce almost 3.8 million passenger cars and light commercial vehicles in the year 2017. This would represent an increase of 8.2% compared to the year 2016. In the first seven months of the year 2017, 2.2 million units left the factories, 10.8% more than in the same period of the previous year.
The leading customer in the export business is the USA. From January until July 2017, the country bought approximately 14% more passenger cars and light commercial vehicles than in the comparable period of the previous year. While automobile manufacturers such as Mercedes-Benz (with Nissan), BMW, Audi and Toyota erected new factories in Mexico, other manufacturers such as General Motors, Fiat-Chrysler, Honda and Hyundai have been expanding their existing factories. Also for Chinese automobile manufacturers, Mexico is becoming more and more interesting as a production country.
The Mexican association of automotive parts manufacturers INA (Industria Nacional de Autopartes) anticipates that in 2017 the sales of the supplier industry will increase by 4 % compared with the previous year to over more than 80 billion US-Dollars. In the year 2017, the USA alone will probably receive components worth more than 60 billion US-Dollars from Mexico.
Meanwhile, most of the tier 1 and tier 2 suppliers are present in Mexico. Now, the influx is marked by tier 3 companies, service suppliers and equipment suppliers for tier 1 to 3 companies. A further trend is that already established suppliers are expanding their range of customers beyond OEMs from their own home country.
Automotive Sector as the Driver of the Mexican Die-Casting Market
By far the largest consumer of die-castings in Mexico is the automotive industry. According to the investigations of the market research company Mordor Intelligence, the Mexican market for automotive parts made by die-casting will grow to a volume of 1.8 billion US-Dollars until the year 2020, whereby in the aluminium die-casting sector a growth rate (CAGR) of 8% is expected until the year 2020. Among Mexico’s leading suppliers of die-castings made from light metals there are companies such as BOCAR, Castwel Autoparts, Die Casting Solutions, Dynacast, Endurance Group, Gibbs Die Casting Group, NEMAK, Power-Cast Monterrey, Rockman Industries and Sandhar Technologies.
This will yield interesting opportunities especially for suppliers of light metal foundries to open up new business relationships. There is a great demand for mold and tool manufacturers, manufacturers of die-casting machines and lines, companies which offer solutions related to industry 4.0 or the after-treatment of castings, manufacturers of industrial furnaces, but also for companies which offer systems for the processing and utilization of operating data as well as companies which are specialized in modernization measures.