Tighter Mexico-Taiwan trade ties are a future certainty
Mexican and Taiwanese economic officials seek a greater development of Mexico-Taiwan trade in manufactures, especially in the aerospace and automotive industries.
With Mexico’s aerospace and automotive industries experiencing healthy annual growth rates of 17.2% and 9.8%, respectively, Taiwanese industry finds itself exporting an increasing quantity of machinery utilized in these sectors to the NAFTA zone’s southernmost member. Other strong export sales to Mexico originating in Taiwan include parts and components for televisions, cell phones and computers.
An example of the strong room for growth in Mexico-Taiwan trade and investment is embodied in the recent forty-million dollar investment made by a Taiwanese manufacturer of gearboxes in the State of Coahuila. Last year, Taoyuan City, Taiwan-based Sixxon Precision Machinery Company opened a plant in the city of Ramos Arizpe. It is also expected that two additional Taiwanese automotive industry suppliers, Macauto Industrial Co Ltd. and Liteon Automotive Corporation, will announce investments in new Mexican production facilities sometime during the remainder of 2015. While the former is a manufacturer of automotive sunshade products for manual sunroofs, electric curved sunroofs, side/fixed windows and other similar products, the latter manufactures vehicle security systems, cruise control modules, and tire-pressure monitoring systems.
Taiwanese exports to and investments in the Mexican automotive sector are expected to rise given estimates which project that, by 2017, Mexico’s yearly passenger vehicle production will expand by a factor of 30%. This means that OEM assembly plants in Mexico will reach and fill the capacity threshold of four million units in the next two years. Mexico-Taiwan trade in the automotive sector has been positively affected as the former country has ascended to become the eighth largest producer and fourth largest of exporter of automobiles in the world.
Taiwanese trade officials also see promise in expanding Mexico-Taiwan trade activity in aerospace industry related goods. The growth of Mexican aerospace parts consumed by global OEMs has expanded by double digits since 2003. While in 2013, Mexican aerospace part exports totaled five billion dollars, estimates are that this number will increase to approximately twelve billion dollars in 2021. Industry experts believe that by the latter date the Mexican aerospace industry will be capable of supporting the manufactacture of an entire commercial aircraft domestically.
Taiwanese trade officials expect a larger particpation in the growth of the Mexican aerospace industry to occur in the coming years. At present, Taiwan’s share of machine tool sales to Mexico is less than 10%, and the Mexico’s market ranks twentieth in global terms of Taiwanese exports. This is despite the fact that Taiwan is the fourth largest exporter of machine tools in the world.
Although both country’s trade officials see the prospect for increased commerce with the other country as being most pronounced in specific industries, the universal expectation is that the stronger Mexico-Taiwan trade ties will increase across manufacturing and service sectors in the forseeable future.