Future of the Mexican Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024
Summary
Mexican defense expenditure recorded a CAGR of 0.83% during the historic period and stood at US$6.4 billion in 2019. Over the forecast period, it is anticipated to register a CAGR of 4.45% to value US$8.0 billion in 2024. Being one of the largest oil and gas exporters in the North American and Latin American region, Mexico was hit hard by the fall in energy prices, which prompted the government to cut back on overall government spending. Due to this, the Mexican defense budget contracted for three consecutive years, 2015, 2016 and 2017, by -8.21%, -13.84% and -5.02%, respectively. The Mexican defense budget is set to register a forecast-period CAGR of 4.45% to reach US$8.0 billion in 2024.
Mexican homeland security (HLS) expenditure stands at US$3.2 billion in 2019 and recorded a CAGR of -10.23% during the historic period. It is expected to grow at a CAGR of 5.87% over the forecast period to reach US$4.8 billion in 2024. Mexico has historically focused on its defense spending on countering drug cartels. “Plan 2030” was initiated to equip the country’s defense forces to better combat drug cartels and other related groups.
The country’s capital expenditure allocation, which stood at an average of 13.3% during 2015-2019, is anticipated to increase to an average of 15.2% over the forecast period. This increase is primarily due to the procurement of advanced defense equipment and a focus on increasing the capabilities of the country’s indigenous defense industry.
Various procurements that are expected to fuel the growth of the capital budget allocation over the forecast period include RGM-84L Harpoon Block II anti-ship missiles, Rolling Airframe Missile (RAM) systems, Super Puma H225M military aircraft, POLA corvettes, SandCat-APVs, Sigma 10514 frigates, Evolved Seasparrow tactical missiles, Damen Stan Patrol 4207 vessels, and FX-05 Xicoatl (Fire Serpent) assault rifles, among many others.
The underdeveloped indigenous defense sector is a major challenge for Mexican military requirements, which makes it an import oriented country for its arms and equipment. Historically, the country has procured the majority of its military equipment from the US, France, the Netherlands and Spain, accounting for 63.1%, 9.5%, 8.9% and 8.1% of total defense imports respectively. Aircraft accounted for the largest share of imports during the historic period, occupying a 73.6% share.
The report "Future of the Mexican Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024", provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.
In particular, it provides an in-depth analysis of the following -
Companies mentioned: Productos Mendoza, Aviabaltika de Mexico Company
Scope
Reasons to Buy
Summary
Mexican defense expenditure recorded a CAGR of 0.83% during the historic period and stood at US$6.4 billion in 2019. Over the forecast period, it is anticipated to register a CAGR of 4.45% to value US$8.0 billion in 2024. Being one of the largest oil and gas exporters in the North American and Latin American region, Mexico was hit hard by the fall in energy prices, which prompted the government to cut back on overall government spending. Due to this, the Mexican defense budget contracted for three consecutive years, 2015, 2016 and 2017, by -8.21%, -13.84% and -5.02%, respectively. The Mexican defense budget is set to register a forecast-period CAGR of 4.45% to reach US$8.0 billion in 2024.
Mexican homeland security (HLS) expenditure stands at US$3.2 billion in 2019 and recorded a CAGR of -10.23% during the historic period. It is expected to grow at a CAGR of 5.87% over the forecast period to reach US$4.8 billion in 2024. Mexico has historically focused on its defense spending on countering drug cartels. “Plan 2030” was initiated to equip the country’s defense forces to better combat drug cartels and other related groups.
The country’s capital expenditure allocation, which stood at an average of 13.3% during 2015-2019, is anticipated to increase to an average of 15.2% over the forecast period. This increase is primarily due to the procurement of advanced defense equipment and a focus on increasing the capabilities of the country’s indigenous defense industry.
Various procurements that are expected to fuel the growth of the capital budget allocation over the forecast period include RGM-84L Harpoon Block II anti-ship missiles, Rolling Airframe Missile (RAM) systems, Super Puma H225M military aircraft, POLA corvettes, SandCat-APVs, Sigma 10514 frigates, Evolved Seasparrow tactical missiles, Damen Stan Patrol 4207 vessels, and FX-05 Xicoatl (Fire Serpent) assault rifles, among many others.
The underdeveloped indigenous defense sector is a major challenge for Mexican military requirements, which makes it an import oriented country for its arms and equipment. Historically, the country has procured the majority of its military equipment from the US, France, the Netherlands and Spain, accounting for 63.1%, 9.5%, 8.9% and 8.1% of total defense imports respectively. Aircraft accounted for the largest share of imports during the historic period, occupying a 73.6% share.
The report "Future of the Mexican Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024", provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.
In particular, it provides an in-depth analysis of the following -
- The defense industry market size and drivers: detailed analysis of the Mexican defense industry during 2020-2024, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
- Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
- Porter’s Five Force analysis of the Mexican defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
- Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
- Market opportunities: details of the top five defense investment opportunities
- Competitive landscape and strategic insights: analysis of the competitive landscape of the Mexican defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
Companies mentioned: Productos Mendoza, Aviabaltika de Mexico Company
Scope
- Mexican defense expenditure recorded a CAGR of 0.83% during the historic period and stood at US$6.4 billion in 2019.
- Over the forecast period, it is anticipated to register a CAGR of 4.45% to value US$8.0 billion in 2024.
- Being one of the largest oil and gas exporters in the North American and Latin American region, Mexico was hit hard by the fall in energy prices, which prompted the government to cut back on overall government spending.
- Due to this, the Mexican defense budget contracted for three consecutive years, 2015, 2016 and 2017, by -8.21%, -13.84% and -5.02%, respectively.
- This had an impact on the overall CAGR during the historic period.
- The defense budget as a percentage of GDP is expected to remain almost the same at an average of 0.49% over the forecast period, compared to an average of 0.49% during the historic period.
Reasons to Buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Mexican defense industry market trends for the coming five years
- The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
- Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of the Mexican defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.
Table of Contents
1. Introduction
3. Market Attractiveness and Emerging Opportunities
4. Defense Procurement Market Dynamics
5. Industry Dynamics
6. Market Entry strategy
7. Competitive Landscape and Strategic Insights
8. Business Environment and Country Risk
9. Appendix
List of Tables
List of Figures
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Productos Mendoza
- Aviabaltika de Mexico Company
