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Touted by some as the “new capital of the automotive industry,” Mexico’s robust supply chain, evolving trade networks, and influx of investment are driving car production companies to flock to the country and making Mexico a center of vehicle manufacturing.
Since its humble beginnings, Mexico’s automotive industry has grown to become the country’s largest manufacturing sector. With automotive production estimated at over 3.7 million units in the year 2020, the AMIA (Mexican Automotive Industry Association) estimates that Mexico will become the fifth-largest automotive producer in the world by 2025. It’s no wonder that automotive suppliers and manufacturers are racing to take part in the booming industry. Vehicle manufacturers from Audi and BMW to Ford, General Motors, and Volkswagen have established operations in the country.
Providing jobs for over one million workers nationwide, Mexico’s automotive industry hosts a workforce known for its skill and low-cost structure. Companies operating automotive plants in Mexico also have access to 300 R&D centers and produce more than 50 auto brands and 500 models. The entry into force of USMCA in 2020 has only primed the industry for even more explosive growth in the near future, with rule-of-origin changes now requiring that 75 percent of total auto content be made in North America to receive duty-free status.
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Auto units produced in 2020
According to AMIA (Mexican Automotive Industry Association) reports, it is estimated that Mexico will produce upwards of 3.7 million units in 2020, making it the sixth-largest motor vehicle producer globally. It is anticipated that Mexico will move up to the fifth-place spot for automotive production by the year 2025.
of Mexico’s auto production is dedicated to export
90 percent of Mexico’s vehicle production is dedicated to global exports, with 79 percent going to the United States. Mexico’s participation in a number of free trade agreements, including USMCA, is the main force behind the country’s automotive manufacturing success.
major sub-sectors create manufacturing opportunity
Automotive manufacturing in Mexico is made up of seven major operations: original equipment (OEM), aftermarket parts, electric and hybrid vehicles, remanufactured products, heavy vehicles, and other specialty motor vehicles.