Mexico automotive industry combines a booming domestic market and record investment on production sites done by almost all top automotive manufacturers and tier 1 suppliers. The outlook to the 2022 is positive yet.
Mexico automotive industry combines a booming domestic market and record investment on production sites done by almost all top automotive manufacturers and tier 1 suppliers. Production development has been driven largely by exports to the USA, but Mexico has also been expanding, with rapid increases in new markets, and exports to Asia growing by 250% since 2010.
The recent entry of brands such as Audi, BMW, Infiniti, Mazda, Honda, Mercedes, Hyundai and Kia has boosted the opportunities for the local customer’s pushing the domestic market up in the sky.
This moment is the result of a long history of good decisions in which the sector’s companies have figured out how to very intelligently join the country’s free trade strategy and adapt to global economic changes, taking advantage of Mexico’s benefits in order to confront these changes. Throughout this history, the presence of large global firms has contributed to developing a production chain that has great potential for connecting to the sector’s global chains, as well as to developing human capital, which the sector’s main companies have incorporated as an asset to their growth strategies.
Mexico is nowadays the seventh largest car producer in the industry and the second exporter to the United States. In 2015, the country manufactured 3.4 million units of light vehicles, 39.9% more than Brazil. Automotive OEM’s are investing more than 27 billion dollars in Mexico, which will add 1.7 million light vehicles to its production capacity.
Companies are pouring in, attracted by the country’s cost-competitive workforce, geographic advantages and preferential access to many of the world’s main markets, as well as its political and economic stability. Just between 2010 and 2015, Mexico received a combined investment of more than 22 billion dollars, focused on the construction of new plants and expansion projects.
Today, 80% of Mexico’s light vehicle production is exported, with 86% of exports going to Canada and the United States. Growth, however, is largely driven by exports to markets outside the North American Free Trade Agreement (NAFTA) region turning Mexico into a true global player. The country’s geographic position presents a unique opportunity to do business with both Asian and European countries, not to mention its closeness to the second biggest economy in the world, the United States.
Furthermore, the country developed a globally competitive logistics infrastructure in order to export vehicles to other international markets.
Overall, the Mexican automotive industry represents 3.2% of the national gross domestic product (GDP) and 18.3% of the manufacturing GDP, generates more than 870,000 direct jobs, and represents 20% of the North American vehicle production
By 2020 the Mexican automotive industry is expected to produce nearly five million light vehicles for 13 brands in more than 30 production facilities. In recent years, the country has shifted from its maquiladora-style manufacturing to becoming a powerhouse in the global automotive industry, creating opportunities for both local and international suppliers and service providers support the industry’s rapid development.
Moreover, the industry is undergoing a transformation from low-cost, low-tech vehicles into high-tech, premium ones, which brings more high value-added activity in the medium and long-term.
With more than 100,000 engineers graduating university per year, Mexico is developing a skilled workforce, qualified for advanced manufacturing operations of any kind. However, rapidly evolving demand with changing technology and quality standards means the supply chain is struggling to keep up with the growth required by the OEMs.
Research, Consulting, Data & Forecast
F2M covers intensively this market with several products developed to help any investigation required.
Market Researches in PDF are immediately available for download with study on the market since 2005 and with forecast up to the 2022.
Auto Data in EXCEL are immediately downloadable with annual sales volume, split by month, for all brands and all models distributed in the market. This year data are released year to date, but you will receive a monthly update until the year-end.
All these and more within our Mexico Store