30 million jobs nationwide are related to the automotive manufacturing industry, which allows Mexico to position itself as the seventh largest vehicle manufacturer in the world and the first in Latin America.

This industry is the most successful in the country in terms of cutting-edge issues and integration within its value chains, since in terms of economics, innovation, employment, and foreign trade, it presents figures that no other sector can reach; here are some of them:

  • During the last five years, 20 out of every 100 dollars of FDI have been attracted by the automotive industry.
  • It generates more than 980,000 jobs per year in production and assembly alone, benefiting around 3.5 million people.
  • It is the fifth largest automotive exporter in the world.
  • It represents almost 4% of the national GDP and 20.5% of the manufacturing GDP.

Challenges of automotive manufacturing

Being the most successful, it is also the industry that generates the most challenges since it has the faithful commitment to contribute positively to global warming and environmental care. We know that Mexico is an important competitor in the world market, however, it must also face a very strong competition, which forces the country to be constantly monitoring the efficiency and quality of all its processes.

Presence in Mexico

There are 21 vehicle assembly plants in Mexico, distributed in 12 Mexican states:

  • Guanajuato has 4 plants: General Motors (Silao), Honda (Celaya), Mazda (Salamanca) and Toyota (Guanajuato).
  • Aguascalientes has 3 plants: Nissan Plant A1, Nissan Plant A2 and Compas.
  • Estado de Mexico, San Luis Potosi, Coahuila and Puebla have 2 plants each.
  • Nuevo Leon, Sonora, Baja California, Morelos, Veracruz and Jalisco have 1 plant.

Production

Automotive manufacturing suffered a drop in production due to COVID-19, however, it has been recovering its pace. The INEGI report detailed that, last march, auto manufacturing in Mexico grew by 13.12% year-on-year, to a total of 346,124 cars.

The northern states are the ones that concentrate the highest production of auto parts, Coahuila tops the list (16.2%), followed by Chihuahua (12.5%) and Nuevo Leon (11.6%).

Foreign trade

Mexico is the main auto parts supplier to the United States. In 2022, 83% of the country’s total automotive exports were directed to the neighboring country (United States). Automotive exports grew by 8.8% in the period January 23 – March 23, compared to the previous year. From January to March of this year, 741,306 vehicles were exported, higher than the 680,992 cars shipped in the first quarter of 2022.

Canada, Germany, Colombia, Brazil, the United Arab Emirates, Chile, Puerto Rico, the United Kingdom, and Peru are other main destinations for vehicles manufactured in Mexico.

Automotive manufacturing is one of the industries that will bring the greatest opportunities to Mexico in the coming years, as it is becoming an excellent geographic point for Nearshoring and entering the U.S. market, thus relocating its global supply chains.