Future of the Mexican Defense Industry Market Research Report At ResearchMoz

Researchmoz presents this most up-to-date research on"Future of the Mexican Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018".The report focuses primarily on quantitative
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Product Synopsis

This report is the result of ResearchMoz extensive market and company research covering the Mexican defense industry, and provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news.


Introduction and Landscape


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Why was the report written?

The Future of the Mexican Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain a market share in the Mexican defense industry.


What is the current market landscape and what is changing?

Mexican defense expenditure, which stands at US$6.5 billion in 2013, increased at a CAGR of 10.1% during the review period. On a cumulative basis, the country is expected to spend an estimated US$42 billion on its armed forces during the forecast period. However, the country's overall defense spending is anticipated to register a CAGR of 11.2% during the forecast period and value US$10.28 billion in 2018. Military spending is expected to be driven by factors such as efforts in combating drug trafficking and the acquisition of advanced defense systems.

What are the key drivers behind recent market changes?

Military modernization to drive defense expenditure and active participation in peacekeeping missions

What makes this report unique and essential to read?

The Future of the Mexican Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 provides detailed analysis of the current industry size and growth expectations from 2014 to 2018, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.

Key Features and Benefits

• The report provides detailed analysis of the current industry size and growth expectations from 2014 to 2018, including highlights of key growth stimulators, and also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
• The report includes trend analysis of imports and exports, together with their implications and impact on the Mexican defense industry.
• The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
• The report allows readers to identify possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
• The report helps the reader to understand the competitive landscape of the defense industry in Mexico. It provides an overview of key defense companies, both domestic and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Key Market Issues

• Corruption is rampant in the Mexican armed forces, specifically in the army. In May 2012, Mexican anti-drug agents arrested a former deputy defense minister and three other retired and active high-ranking Mexican army officers on suspicion of involvement in the drug cartel, which is in addition to the detention of 10 army officials in 2009 for allegedly accepting payments from a drug cartel to give it tip-offs in regard to government operations against drug gangs. The federal Government deployed the army and the marine to counter the problem of drug trafficking due to rampant corruption and involvement of the police force in the narcotics activity. In December 2011, the entire Veracruz police force was sacked, with the 800 officers replaced by marine officers. In the present time, the military is taking over the policing in Ciudad Juarez, Nuevo Leon and the border state of Tamaulipas with special training imparted to address stability issues in the regions and working towards maintaining law and order.
• As the Mexican defense industry comprises only state-owned companies, with little specialization in weapon categories, the resulting lack of advanced defense technology means that foreign weapon suppliers that intend to conduct business in Mexico face infrastructure challenges. Although foreign suppliers can bring advanced technology to Mexico, this results in technology imports without offset incentives as the defense offset terms are not clearly defined by the Mexican MoD; consequently, foreign suppliers find pursuing a defense opportunity in Mexico challenging.

Key Highlights

• As the Mexican domestic defense industrial base is limited, the nation is dependent on foreign sources of arms to fulfill its military requirements. The country's defense spending grew at a CAGR of 10.1% in the review period, to stand at US$6.51 billion in 2013, which provided foreign suppliers with a lucrative opportunity to gain access to one of the fastest growing defense markets in Latin America. As the country lacks a formal offset obligation for arms procurement, foreign OEMs aren't incentivized to set up a branch or subsidiary in Mexico and prefer direct sales when entering the industry, which was evidenced by the EADS contract from the Mexican Air Force to provide CN-235-300M Persuader maritime patrol aircraft; likewise, Textron Marine and Land Systems also won an order to deliver six Motor Lifeboats to the Mexican Navy in 2008.
• The Mexican MoD is exploring options to strengthen its ties with various countries such as the US, France, China, Spain, and Israel in terms of technology or product development. This initiative has opened up defense collaborations as another option for foreign companies to enter the Mexican defense market. In 2009, Eurocopter, an EADS company, announced plans to install a US$700 million assembly facility in Mexico, and in turn, the Mexican government agreed to buy six EC 725 multipurpose helicopters made by Eurocopter, worth US$300 million. The package also included training for Mexican military personnel along with surveillance and reconnaissance electronic equipment. The government is also expected to acquire more Cougar helicopters and AS565 Panthers from EADS.
• During the review period, Spain emerged as the largest supplier of military hardware to Mexico with a share of 34% of total defense imports, followed by US with 32%, and France with 12%. This was a result of Mexico's acquisition of aircraft and aircraft parts from Spain in 2009 and 2010 and the purchase of sensors, engines, and aircraft from the US, which resulted in the US becoming the second largest exporter of arms to Mexico during the review period. Other important import partners of Mexico's defense industry were Italy, Canada, and Russia. 

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