Market Trends of Mexico Factory Automation and ICS Industry
Automotive Segment to Hold Significant Market Growth
- For the past 50 years, the automotive industry has used robots in its assembly lines for various manufacturing processes. Currently, automakers are exploring the use of robotics in more procedures. Robots are more efficient, flexible, accurate, and dependable for such production lines. This technology enables the automotive industry to remain one of the most significant robot users and possess one of the most automated supply chains.
- Further, Mexico is primarily a production hub for vehicle manufacturers and automotive parts suppliers that export to the United States and South America. At USD 2.61 trillion, Mexico is the fifteenth-largest global economy, home to 20 automotive assembly manufacturers, including BMW, Mercedes, Audi, Ford, Chrysler, and Nissan. They are putting more pressure on the local plants to improve the quality, get better safety, and improve throughout, which is driving automation and robotics.
- According to INEGI, the number of light vehicles produced in Mexico amounted to almost 2.8 million in 2022, representing an increase of around 10% compared with the production volume reported a year earlier. Such increases in automobile production may further raise demand in the studied market.
- The stabilizing economy of the United States is also supporting this growth as the country accounts for 70% of the automobile exports from Mexico. The country shares the 1,900-mile border with the United States, which has helped the country's industries with further help from NAFTA, with which it has virtually zero market access barriers for US exports. In addition, the Mexican automobile and pickup truck manufacturing industry's revenue is expected to reach USD 79.97 million by the end of 2023, according to INEGI. Such developments are anticipated to influence the demand over the coming years further.
- The Mexican manufacturing industry has driven and digitalized significantly in recent years to improve productivity, primarily owing to the automotive sector in the country, which is the sixth-largest maker of heavy-duty vehicles for cargo in the world. For instance, according to the International Trade Administration (ITA), 95.1% of its tractor-truck production is exported to the United States, making it the world's leading exporter.
- Furthermore, Mexico's manufacturing and, most prominently, the automobile manufacturing sector has driven the country as one of Latin America's powerhouses for innovation and technology. To sustain the country's flourishing manufacturing industry, the Association for Advancing Automation (A3) has launched A3 Mexico to help the proliferation of the manufacturing sector with robotics.
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Utility Segment to Witness Major Growth
- The power and utility sector has been an early adopter of digital technologies, which has resulted in improved process automation and control across Mexico. According to the Ministry of Energy, the Mexican power generation sector is expected to witness investments of over MXN 2039.89 billion ( USD 107.67 billion) by 2030, with most investments diverting toward power generation establishments and power transmission infrastructure.
- The smart grid and synchronization evolution to match the variable demand for electricity between the peak demand period and the rest of the period demand is expected to create high demand from the energy and utilities sector. Further, Mexico is expected to invest USD 6.3 billion in smart grid infrastructure and a further USD 2.1 billion in LED and smart street lighting by 2027, which may create vast opportunities for the concerned market players.
- CFE announced in September 2022 that it would push investment projects for renewable energy, with geothermal as the critical technology, to receive around MXN 1.5 billion (Mexican peso, around USD 75.2 million).
- In addition, solar and wind energy will receive around MXN 16.7 million ( USD 0.88 million). Furthermore, the country's natural gas-fired power facilities will likely rise in response to rising electricity demand. With such a favorable investment scenario in the country's utility sector, led by renewal or new construction projects, the need for factory automation and industrial control system solutions is expected to increase.
- According to IRENA, Mexico's renewable energy generation capacity has increased annually throughout the past decade. In 2022, the Latin American country's installed capacity surpassed 31.7 gigawatts, more than double the capacity reported in the past few years. Further, Mexico's renewable energy consumption in recent years amounted to some 360 petajoules.
