NEWS

USMCA: An opportunity for the auto parts sector

Friday, June 19, 2020

Thanks to the USMCA to be implemented on July 1st, the new rule of origin allows the national content in automotive manufacturing to increase from 62.5% to 75%.

One of the most benefited states will be Sonora; its geographical location offers the entity the opportunity to attract new auto parts companies that want to settle in Mexico, in order to meet the percentage established by the agreement. This will also facilitate promoting that companies involved incorporate technology development centers so that, in addition to knowledge and innovation, they help comply with the salary rule; establishing that the country must pay $16 USD per hour to the labor sector of the industry; therefore, efforts will focus on the development of research positions.

Mario Hernández, leading partner of the Manufacturing, Maquiladora and Export Services Industry (IMMEX) of KPMG, reported the difficult scenario in the face of the Covid-19 pandemic: “Difficult times are coming due to the pandemic because of what will happen next. Manufacturing companies are restarting activities, those in the automotive sector started, but not 100%”; thus the transition to new production agreements will depend on a process of adaptation and changes in the industry.

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Source: El Imparcial.