More attractive sectors for investment
The existing research has confirmed Mexico to be a more adaptive country for putting in place industry-based organizations. Additionally, the world’s top-notch organization dealing with pharmaceuticals and automobile products has shown much interest in expanding its market base to Mexico. The manufacturing industry sector in Mexico has identified business opportunities from various sectors whereby the products manufactured can bring a substantial positive impact on the economy. Among the advantageous sectors found in the Mexican industry include furniture, electronics, and HVAC manufacturing. In light of the above, it however, worth noting three areas that have been a significant contributor to the drastic improvement in the manufacturing industry. The three sectors include automotive, aerospace, and medical device manufacturing. Again, the sectors mentioned earlier have been confirmed to be more favorable when it comes to investing.
Automotive sector
Over the last decade, the automotive sector has been the lifeblood for the Mexican economy due to its immense contribution to the manufacturing industry. Galvin, Goracinova & Wolfe (2015) suggest that world superpowers, including the U.S and China, have chosen Mexico as the center for manufacturing automotive devices. Within the past decade, the Mexican government and other investors have put in over $23 billion in the automobile sector. The above colossal capital invested in the capital brings forth an illustration that the automotive industry in Mexico is more adaptive for investment as compared to other countries. When it comes to manufacturing and exporting of automotive devices, Galvin, Goracinova & Wolfe (2015) suggest that Mexico’s strategic position makes it a center of interest. In addition to being located close to the U.S, Mexico’s western port location makes it more adaptable in exporting automotive machines to countries like Asia, New Zealand, and Australia. As such, Mexico has been ranked as among the most efficient supplier across the world. Galvin, Goracinova & Wolfe (2015) further opine that various countries, including the U.S, China, and Japan, have been exporting their automotive-related products to China in search of easily accessible yet ready markets.
Notably, Mexico is a significant participant in the North America Free Trade Agreement as well as 44- Free Trade Agreement. Precisely, Mexico’s participation in the above treaties boosts its relationship with the other neighboring countries hence an increased volume of exported products. According to Galvin, Goracinova & Wolfe (2015), Mexico association with the stipulated trade agreements creates a healthy relationship with the other countries, hence attaining a more favorable international trade. Currently, 70% of well-established companies, including Fiat Chrysler, have shown interest in expanding its market base in entire Mexico. The second example is evidenced by Gentherm, a global development company that presented an interest in stretching its market base in Mexico. To this end, it is evident that the Mexican automotive industry is among the sectors that any willing investor would aspire to venture into.
Aerospace sector
Aerospace is yet another sector that is more attractive for investment in the sense that the production airline automotive has been booming for the last few years. The alarming growth of the aerospace sector was confirmed by reports which were generated by PWC. PWC brought into the limelight that the Gross Domestic Product of the aerospace industry in Mexico improved by 20% within the last five years. According to Flores, Villarreal & Flores (2017), the industry has attracted a capital amounting to $3183.7 million due to open trade policies. The authors further suggested that the Mexican government has been working tirelessly to ensure that the aerospace industry is in line with the provisions of continuous quality improvement. Pro-Aereo 2012-2020 has as well been working towards making Mexican aerospace more desirable through making it to be among the top ten suppliers.
The aerospace manufacturers have maintained a competitive advantage over other sectors by offering quality yet affordable labor. It is worth noting that other countries, including the U.S, have contributed significantly by bringing in manufactured parts to Mexico to ensure the industry has enough supply of aerospace-related products. Flores, Villarreal & Flores (2017) suggest that Mexican aerospace participants made a collaboration with NAFTA as well as the Maquiladora factory system to ensure that the produced parts are of high quality yet less expensive. The above analysis conducted by Flores, Villarreal & Flores (2017) concludes that the Mexican aerospace industry is among the sectors to be considered for a person intending to invest. It is worth noting that the industry has been made more desirable by not only the Mexican government but also the foreign countries, including the U.S and China.
Medical device manufacturing
Medical device manufacturing is the third most attractive investment in Mexico. According to the study conducted by Mexico’s Ministry, the Mexican medical device manufacturing sector is the sixth-largest exporter globally (Arredondo, Carrillo, Solís & Ávila, 2019). For instance, exports amounting to 5.798 billion came from medical device manufacturing alone, suggesting that the sector is among the significant contributors of the Mexican international trade. Arredondo, Carrillo, Solís & Ávila, (2019) further confirm that the medical device manufacturing industry seems not to show any signs of sliding back due to its consistent growth. Consistent improvement of medical device manufacturing was confirmed by an overall annual growth rate of 13.8 % between the year of 2013 and 2018. Flex is an excellent example of a company that has been successfully producing and exporting medical devices. Flex company can be used to explain that the production of medical equipment in Mexico is yet a looming investment opportunity in Mexico where investors can earn good money. Besides, Flex seems to be growing consistently since, in 2017, it launched a new branch in Tijuana, which absorbed a considerable number of workforce amounting to 2,400 employees. Based on the above evaluation, it is evident that medical device manufacturing has been growing significantly over the last few decades. As a result, investors can consider investing in the pharmaceutical manufacturing sector, which will, in turn, bring tangible returns after the stipulated period. Importantly, the industry has been ranked as one of the ones that are surrounded by minimal risks as far as investment is concerned.