by Luis Rojas

MEXICO CITY, Jan. 23 (Xinhua) — With a growing number of international tourists, Mexico’s aeronautics industry is poised for record growth, experts say.

Relatively a “young” industry in Mexico, the aeronautics industry has seen a sustained annual export growth of about 15 percent since records began in 2004, when exports brought in 1 billion U.S. dollars, according to the Mexican Aerospace Industry Federation (FEMIA).

The export revenue of the sector, which employs some 60,000 people, amounted to about 8.5 billion dollars in 2018, while in 2017, the figure was 7.6 billion dollars with 50,000 employees, attesting to the dynamic growth of the industry, said FEMIA’s Director General Luis Lizcano.

“In less than a decade, Mexico has succeeded in consolidating a competitive structure in this sector… Mexico now ranks the world’s 12th in exports and the exports will continue to grow in every area of an airplane, from the interiors to structures, landing gear, turbines, design and maintenance,” said Lizcano.

Mexico is home to more than 300 industrial plants operated by about 100 domestic and overseas aeronautics companies, most concentrated in its northern states. And as much as 80 percent of its aeronautic products goes to the United States.

“The industry proved to be much more resistant to global ups and downs, and is more stable in economic and financial aspects” than other industries, said FEMIA’s President Felipe de Jesus Sandoval.

“There is an immense, impressive opportunity for the aeronautics industry to develop its capacity as the automotive industry has successfully done,” Sandoval said, adding that the aeronautics industry only takes up 5 percent of the manufacturing chain, compared with 65 percent for the automotive industry.

Daniel Parfait, president of the Mexican branch of Safran, a French multinational aircraft engine maker, said his company is allotting more investment each year to expand capacity, given the solid demand for products. “The outlook is absolutely excellent,” he said.

“We haven’t felt any impact from the trade negotiations between Mexico and its partners, and I think it will stay that way,” he added, referring to last year’s renegotiation of the North American Free Trade Agreement (NAFTA), now called the United States-Mexico-Canada Agreement (USMCA).

Safran operates 20 facilities in Mexico and now employs 13,000 people, up from 4,000 in 2012. The company’s global sales grew 26 percent last year, a percentage that also applies to Mexico, said Parfait.

“The aviation industry is going to double. There is a lot of growth in terms of the number of passengers and production is going to increase,” said Edward Tobon, regional director for Boeing Latin America.

“The biggest supplier for us is Mexico, and in terms of aviation growth, Brazil is also important, but the region is good in general,” he added.

In Mexico, Boeing acquires around 1 trillion aircraft parts each year. The demand from Latin America for Boeing airplanes stand at 1,500, a figure Tobon expects to double over the next 15-20 years.

Latin America expects an annual growth of 3.6 percent in tourism flow to reach 731 million by 2037, up by 371 million from the current figure.



by John Siciliano

The untapped market for U.S. crude oil and natural gas isn’t across the sea in Asia or Europe, but just across the border in Mexico.

More than 50 percent of Mexico’s energy imports now comes from the U.S. as Mexico’s national oil and gas company, Pemex, struggles to reinvest in its own production, according to a new report due out this week from S&P Global Platts that underscores the large stake Mexico has in buying fossil fuels from the United States.

The country also has to move forward with a plan that began two years ago to restructure its energy markets and make them more competitive by attracting more participants from the U.S. and other countries.

President Trump often touts America’s rapid growth as an oil and gas producer and exporter. The White House last week issued a statement touting new Energy Department data that showed the U.S. is on target to become a net natural gas exporter this year, meaning it will ship more of the fuel abroad than it imports. Mexico will play a role in that.

“Pipeline imports of U.S. natural gas make up nearly 60 percent of total Mexican natural gas supply, compared to just 22 percent in 2010,” according to the report’s executive summary reviewed ahead of publication by the Washington Examiner. And that trend isn’t about to change any time soon. “Platts Analytics expects that U.S. natural gas imports will rise to nearly 70 percent of total supply by 2022.”

To meet the demand for natural gas from the U.S., Mexican pipeline import capacity has risen by 145 percent in the last seven years, according to the report. Mexican officials in the U.S. recently pointed out that the increase in natural gas use is driven partly by environmental targets that demand it switch to cleaner-burning natural gas to meet its electricity demand.

But Mexico is a bit of a novice in dealing with the complexities of operating a competitive natural gas market. It only just ramped up a new natural gas trading structure last month as part of its five-year market restructuring plan, according to S&P Global.

“Mexico’s natural gas market is in a massive state of flux,” according to S&P Global. “Gas trading is still in a nascent stage of development after getting off the ground in July.” Natural gas purchasers are being cautious about the new system that is meant to inject more competition into the market. “Gas buyers are hesitant to leave Pemex” and be dependent on another supplier, given that “current supply/demand conditions suggest that areas of supply shortage and/or transportation constraints could experience [higher] premium prices.”

Manufacturers and other industrial natural gas customers “have expressed concern about the recent lifting of natural gas price caps on first-hand sales and the possibility of price spikes in some regions,” according to the report. On the generation side, the cost of electricity has increased at a healthy pace compared to the lower prices in the United States, but that’s because the Mexican market has struggled to keep up with demand for the clean-burning fossil fuel.

Power prices are climbing in Mexico as the natural gas market tightens, with prices rising 56 percent in the first half of the year, the report said.

But those hiccups aren’t stopping U.S. energy companies from wanting to get into the Mexican market. Take ExxonMobil, for example. It “sees Mexico as an expanding market” where demand for fossil-based fuels is projected to grow more than 40 percent over the next 25 years, according to the report. At the same time, U.S. demand is expected to fall by 17 percent. The market for gasoline and diesel will be growing in Mexico, while the U.S. market is shrinking.

Mexican imports of refined U.S. oil products such as gasoline experienced massive growth in the first quarter of 2017.

“Unable to meet growing demand with local production, Mexico is opening its refined products markets to competition,” the report said. “Imports of U.S. petroleum products over the first four months of 2017 were up over 125 percent year-on-year. Mexico is in the process of expanding its refined products pipelines and terminals, and allowing outside access to existing assets.”

That might be the reason why BP opened its first internationally branded retail gas station in Mexico City in May. It is the first of 1,500 new fuel stations that the oil company plans to build in the country.

In contrast to the U.S., some large oil companies like Exxon have completely exited from the gas station business altogether over the last decade.

Meanwhile, Mexico’s Pemex opened its first gas station in the United States about a year and a half ago in Houston. A Pemex official at the time said the station is meant to test the company’s ability to compete in the U.S. It plans to build a fleet of five stations in the Houston area.

“We want to be put to the toughest test,” said José Manuel Carrera Panizzo, the company’s head of business development. “In terms of historic importance, it’s the first time Pemex puts a gas station outside the Mexican borders,” he said. “We’re trying to bring Mexico closer to American consumers … [and] we’re very excited.”




By Pete Evans

After six consecutive months of record output, Mexico now makes more than one out of every five cars built in North America, new numbers from automotive organization Ward’s shows.

Mexico built 1,926,930 cars in the first half of 2017, almost 16 per cent more than the country cranked out in the first six months of last year. That compares with 1,208,911 Canadian-built vehicles over the same period, a figure which dipped by 2.4 per cent from last year’s level.

The boom means Mexico now makes more cars than the U.S. does, as America built 1,697,551 cars in the first half of 2017. Compared to last year, that figure is down by 17 per cent — about what Mexico’s output has expanded by.

Mexico may now be making more cars than America does, but when larger vehicles such as trucks, vans and SUVs are included, America still leads the region in vehicle production, with 5,812,310 through June — although that figure is down almost five per cent in the past year.

Profit margins on those vehicles tend to be higher, which is why North American automakers build them closer to home, while outsourcing smaller vehicles that aren’t selling as well as they used to.

Last month, Ford announced plans to produce all of its Focuses at a new plant in China, the first time the company will build cars in that country that are destined for sale in North America. Previously, the plan was to build the Focus in Mexico, before changing that plan after pressure from the White House.

And General Motors in January announced it would be cutting 625 jobs at one of its Ontario facilities and moving production to Mexico instead.

U.S. President Donald Trump has vowed to energize American manufacturing in his presidency, and the subject of auto jobs is likely to come up in NAFTA discussions between the three nations slated to start later this summer.

While Trump has rallied support for the Made In America movement, the reality of the North American automotive supply chain makes that basically impossible to achieve, since companies build and assemble hundreds of different components in various countries along the way toward building a single vehicle.

Roughly 40 per cent of the components in a vehicle considered to be made in Mexico in fact come from the U.S., the non-partisan think tank the Center for Automotive Research (CAR) said in a report earlier this year. In Canada, the ratio is about 25 per cent.

A hard-line approach requiring that all cars sold in America be fully made and assembled in America would cost the U.S. about 30,000 jobs, and add thousands of dollars to the price of a vehicle, CAR said.




The “Made in Mexico” label has become more plentiful on American car lots this year, even as auto makers pressured by President Donald Trump kicked off the year with promises to create more jobs in the U.S.

A move by auto makers to produce some popular sport-utility models in Mexican factories helped spur a 16% increase in production of light vehicles in Mexico during the first six months of the year compared with the same period in 2016. At the same time, tepid sales of sedans held down production in the U.S. and Canada, according to new data posted by

The data indicates one in five cars built in the North American Free Trade Agreement zone comes from Mexico, including hot new products from General Motors Co. and Fiat Chrysler Automobiles NV. That is up from the industry’s reliance on Mexico during the financial crisis, when the U.S. car business received billions of dollars in bailouts aimed at preserving jobs and keeping domestic players afloat.

Mr. Trump launched several attacks on Mexican car imports throughout his campaign and after his election, saying more auto-factory jobs should remain in the U.S. Since then, auto makers have committed to several initiatives, including a move by Ford Motor Co. to scrap a new assembly plant being built in Mexico and invest some of the money saved in a Michigan factory that will add jobs. GM and Fiat Chrysler have said they intend to invest billions of dollars to add jobs in factories in coming years, citing favorable policies related to tax reform and other issues as reason for optimism.

The Trump administration in August will kick off new talks with Canada and Mexico on an overhaul to Nafta. The vehicle-manufacturing business — including a sprawling supply base — is a central negotiation point.

The latest data from WardsAuto shows that U.S. light-vehicle manufacturing fell 5% during the first six months of this year from a year earlier, as auto makers shed workers or scheduled significant downtime to counter a slowdown in demand for sedans. A substantial chunk of America’s automotive manufacturing footprint is devoted to production of family cars or compact cars, which aren’t faring well as gasoline prices remain low and sport-utility vehicles grow in popularity.

Separate U.S. trade data shows that the value of light-vehicle imports from Mexico to the U.S. ballooned 40% through May.

United Auto Workers President Dennis Williams told reporters last week that the union is planning to launch a “Made in America” campaign later this year, an effort to support hundreds of thousands of members building vehicles or parts in U.S. factories. Mr. Williams is looking to follow the Trump administration’s focus on American-made products and will use the effort to educate consumers on how to know if a car is built in America.

Finding those cars is getting harder.

Pickups such as some versions of FCA’s Ram and Chevrolet Silverado, two of the best-selling vehicles in America, are built in Mexico.

GM and Chrysler this year also started producing small crossover SUVs in Mexican plants; these are considered important vehicles for U.S. dealerships because of their growing popularity as consumers shift away from passenger cars.

GM shifted some production of a revamped version of its popular Chevrolet Equinox crossover SUV to Mexico from plants in U.S. and Canada. Over the next few years, the largest U.S. auto maker is expected to add other new models to factories south of the border.

Most of Fiat Chrysler’s increase comes from a decision to shift North American manufacturing of the Jeep Compass from the U.S. to Mexico. An all-new version of that small SUV is being built at FCA’s plant in Toluca, Mexico, which has seen year-to-date production increase 177%, according to WardsAuto.

Meanwhile output at FCA’s factory in Belvidere, Illinois is down nearly 93% year to date, as production of the older Compass model has ended and two new models of the Jeep Patriot and Dodge Dart were canceled. That plant has been retooled for production of a new Jeep Cherokee midsize SUV, which just began in June after being shifted from a Toledo facility.




By Kenneth Rapoza

Mexico has a lot of well-known problems. Drugs. Poverty. Corruption. And on the corporate side, low-levels of production outside of the major multinational owned manufacturing firms. But despite the campaign rhetoric to build a wall and to knock Mexico down a peg in a NAFTA do-over, there is one problem our neighbor does not have: beating every single equity market in the Americas to a pulp.

For investors, Mexico is great…again. After a slight lull in affection back in April, the market has rediscovered Mexico now for the past two months. The trend is seen continuing until the fourth quarter.

Mexico was already great at the end of last year on into January for bond investors. They bought local currency Mexican government bonds when the peso fell to its lowest level on record, around 22 to the dollar. It’s now 17.17 to the dollar.  Those investors have gained at least 14.8% since January on the currency alone. The second-place currency in terms of strength against the dollar this year is the Brazilian real and that’s only gained 3.5%.

Morgan Stanley says the Mexico bull run is not over.

Economist Luis Arcentales of Morgan Stanley in New York says the mood has markedly changed since Trump first won the White House. “Besides the great food and the awful traffic, I did sense a shift among local investors who seemed much more constructive about Mexico after having been quite cautious because of a whole host of factors ranging from domestic politics to concerns about protectionism,” he says.

Last week’s news on upcoming NAFTA revisions helped strengthen Mexican markets seven more.  Many of the elements added, such as beefing up local content rules for manufacturers, protecting intellectual property rights and labor provisions were included in President Obama’s failed Trans-Pacific Partnership negotiations, and both Mexico and Canada agreed to make those concessions out of concern that the U.S. would bail and turn to Asia instead. NAFTA renegotiations begin on Aug. 16.

For Arcentales, barring the proposal to scrap the Chapter 19 rule in NAFTA on anti-dumping and trade duty matters in favor of the U.S., most Mexico watchers today think NAFTA just gets better, not worse.

Mexico has benefited from better coordination between the federal government’s two most important entities: oil firm Pemex and the central bank of Mexico, Banxico. Fiscal and monetary policies are tighter, energy reform that allows for greater foreign participation (meaning less spending for Pemex) has been a success thus far, and the central bank managed to protect the currency well, with ample reserves in a severe downturn.

Morgan Stanley strategists say they see “a window of opportunity to express a bullish view” on Mexico at least until their presidential elections next summer. Morgan analysts expect volatility to pick up in the first quarter.

“The story for the Mexican peso will be different in 2018,” says Andres Jaime, a strategist at Morgan.

The peso is unlikely to move closer to the dollar than 17 pesos. It’s already up from 18.12 when FORBES ran its portfolio manager profile on BlackRock’s Gerardo Rodriguez in June. Next year, political uncertainty will have a bigger influence on the currency and on Mexico in general, with volatility kicking into high gear by March. “Some cheapness in the currency is a near certainty in my view, particularly in the second quarter of 2018,” Jaime says.

For now, Mexico is still in the sweet spot. There’s potential for more upside.

Mexico seems to be in the midst of a period of relative calm. Investors have decided to shelve politics for now, possibly until NAFTA negotiations are well under way. Or in early 2018, when party alliances and candidates are defined. The economy is facing a full employment scenario similar to that of the United States. The official unemployment rate as of June is just 3.3%, down from 3.5% for much of the year. The net labor force participation rate rose to 59.3% from 59.2% in May.

Industrial production remains tepid, but that is because the statistical element is heavily weighted towards Mexico’s energy sector and construction.

Mexico continues to face downside risks from public spending cuts, higher gasoline prices and slightly higher interest rates, but it has since avoided the most adverse scenarios trumped up by the media, with the help of the president himself.

To date, there has been no mass deportations of Mexico’s illegal U.S. residents. Such a move would have put undue strain on Mexican public services. Many Mexicans in the United States, included undocumented workers, send money to their families in poor cities and towns across the country. That’s less money the Mexican government has to spend on social welfare, having counted on money from Mexican-Americans now for generations.

NAFTA meanwhile is still firing on all four cylinders, wiping out fears that Trump would sign an executive order calling for the immediate withdrawal from the trade treaty signed in 1995 under President Bill Clinton. They’ve dodged two bullets, helping, for investors anyway, to make Mexico great again.

“Mexico’s better than expected economic performance adds to 2017’s resurgence of emerging markets which is lifting global GDP growth back to potential,” says PNC Financial’s senior international economist Bill Adams in Pittsburgh. “The global economy has reached the sweet spot of the economic expansion,” he says, and within Latin America at least, Mexico is smack dab in the middle of that sweet spot.




By Anthony Esposito

MEXICO CITY (Reuters) – Mexico’s government on Monday said it would work to strengthen the North American economy after the United States published its objectives for the renegotiation of the NAFTA trade deal, which one Mexican official described as “not as bad” as feared.

In a statement, the Mexican economy ministry said it expected talks between the United States, Mexico and Canada on renegotiating the North American Free Trade Agreement (NAFTA) to be able to get under way from Aug. 16.

For now, Mexico would continue with domestic consultations on the revamp of the accord until early August, it added.

The ministry said it would work “to achieve a constructive negotiation process that will allow trade and investment flows to increase and consolidates cooperation and economic integration to strengthen North American competitiveness.”

The United States said its top priority for the talks was shrinking the U.S. trade deficit with Mexico and Canada, a recurring complaint of U.S. President Donald Trump. [L1N1K8149]

In a highly anticipated document sent to lawmakers, U.S. Trade Representative Robert Lighthizer said he would seek to reduce the trade imbalance by improving access for U.S. goods exported to Canada and Mexico under the three-nation pact.

Speaking under condition of anonymity, a senior Mexican official said the list of priorities was “not as bad as I was expecting” and welcomed that the United States was not pushing to impose punitive tariffs, as Trump has threatened.

The official also noted the U.S. wish to ditch the Chapter 19 dispute settlement mechanism that has hindered the United States from pursuing anti-dumping and anti-subsidy cases against Mexican and Canadian firms would be resisted firmly by Canada.

“Canada will fight to (the) death on Chapter 19,” the official said.




NAI Mexico is pleased to invite you to the Tijuana Operations Directors Forum, Wednesday, June 14th.

Global industrial operations executives in Northern Mexico are meeting for lunch at Club de Empresarios de Baja California , Tijuana, from 1:00 – 3:00 p.m.
The event will feature 3 industry experts— providing thought leadership from ​the Otay Mesa Chamber of Commerce (Cali-Baja unique global location), Seraph (management consulting), and NAI (global business advisory) discussing the US political election, Mexico operations competitiveness, potential tariff impacts, and how executives can remain competitive during 2017’s disrupted market uncertainty. The luncheon event is complementary to NAI invited clients .

The main objective is to:

  • Share operations impacts in Mexico due to the US election,
  • Tools available to planning managers to understand their competitive position in Mexico,
  • Tools to help operations remain competitive with their internal corporate operations in the US— and world markets.


The Tijuana Operations Directors Forum  will present the impact of US political elections, latest trends in Mexico, and how directors can support their 2017 planning processes. The agenda will include:

  1. Welcome and Introduction to Visitors
    • Host Welcome:   NAI Mexico, Gary Swedback, CEO
      • Introduction to the Presenters
  2. Current Trade Developments the Cali-Baja Region
    • Presented by:   Otay Mesa Chamber of Commerce Alejandra Mier y Teran Executive Director
      • Cali-Baja Region Overview
      • Regional Infrastructure Projects Impacting Trade
      • Cali-Baja Perceptions Regarding Impact from US Political Election: What to Expect
  3. Impact of US Elections on Foreign Industrial Operations in Mexico: Planning 2017
    • Presented by:   Seraph   Ambrose Conroy: Founder and Managing Partner
      • Proposed Changes by the Incoming US Leadership
      • Likely Impact on Foreign Firms and Exporters in Mexico
      • Preparation Suggestions by Industry Sector
  4. Tools for Planning in Mexico and Other Markets
    • Presented by:   NAI Mexico   Gary Swedback: CEO
      • US Elections: Feedback from Our Global Clients
      • Planning Mexico vs. Other Markets
      • Multi-Market Comparison Analyses: Total Occupancy Cost
      • New Tools Available for Operations Planning: 2017 :  How to Stay Ahead
  5. What Are Most Important Issues to Maintain Competitiveness for Management Teams in Northern Mexico?
    • Roundtable and Interactive Discussion
    • Largest Challenges Perceived for 2017

Club de Empresarios de Baja California, Manuel Marquez de Leon 1301 Torre Diamante, Piso 26 New City Zona Urbana Rio 22010, Tijuana, B.C., Mexico.


Best Regards,

With our ongoing effort to keep you informed regarding the impacts of NAFTA on your clients and in Mexico, please receive this invitation to NAIOP’s I.CON ’17: Trends and Forecasts conference, on June 8-9.

I will be speaking regarding the impact of the US Political Election on NAFTA, Mexico, and real estate projects for your clients.

I hope you can join us in Long Beach, CA.  My panel session starts at 9:00 am on Thursday.

Here is the link:

Let me know if you would like to know more regarding the pending changes to NAFTA and how to keep your clients informed.

As always, lets work together.

Best Regards,

Tijuana, Baja California – Mexico continues to be a major focus for hotel and resort development for both local and international hotel brands and operators, due to rapidly accelerating demand during 2017. This also includes integrated Mixed Use projects, focused on a mix of residential, retail and hospitality.

The Caribbean and Mexico Hotel & Resort Expansion Forum gathers high-level executives from Government Developers, Investors, Regulators, Construction Companies, Architects, Solution Providers, Financial Institutes and Associations in a focused two-day program. Panel presentations will share investment strategies, operations efficiency and updated technologies. The 2nd Mexico Hotel & Resort Expansion Forum scheduled from 7th-8th June, 2017, Hilton Santa Fe, Mexico City, Mexico.

Mr. Hoekstra noted:

“Excellent event with top level speakers and attendees, offering an informative platform to grow your business and network with peers and colleagues”

Mr. Hoekstra is the national Director of the Mixed Use & Capital Markets Division at NAI Mexico. Mr. Hoekstra will chair: Mixed Use Development: the Next Generation. This panel will host recognized LatAm experts sharing forecasts and strategies for integrated hospitality, residential, and retail uses. Mr. Hoekstra leads teams of experts managing strategic locations throughout Mexico, providing a wide variety of professional services, from financial advisory to disposition and acquisition brokerage

For tickets and agenda select the follow link:

For more information please contact:

TIJUANA, Baja California, May 26, 2017  NAI Mexico announced today it will host the “TIJUANA Operations Directors Forum” for global industrial operations executives on Wednesday, June 14, 2017.

The event will feature 3 industry experts providing thought leadership from Otay Mesa Chamber of Commerce (Cali-Baja unique global location), Seraph (management consulting), and NAI (global business advisory) discussing the US political election, Mexico operations competitiveness, potential tariff impacts, and how executives can remain competitive during 2017’s disrupted market. The event is complementary to NAI invited clients.

NAI Mexico CEO Gary Swedback noted:

“The main objective is to enable operations managers to understand impact in Mexico due to the US election, tools for planning managers and how to help their operations remain competitive, internallly in the US, and world markets”

The event will be hosted at Club de Empresarios de Baja California, for a small—select group, limited to 40 executives Wednesday, June 14, from 1:00 – 3:00 p.m.

For additional info please visit:

NAI Mexico is an exclusive member of NAI, the world’s leading managed network of commercial real estate firms serving over 390 markets worldwide.
NAI Mexico advises both Mexican and global clients through a platform of 11 offices in Mexico. In addition to traditional leasing and sales, NAI Mexico offers additional integrated services for design and construction, project management, valuation, advisory consulting, market analytics, capital markets and supply chain solutions.

For more details and agenda, please contact:
Sandra Soto
T (664) 971 0333