Industry profile

The Automotive Industry in Mexico

Mexico has a mature, dynamic and growing automotive industry. According to data from the Mexican Automotive Industry Association (AMIA) and Business Monitor International, in 2010 the automotive industry, accounted for approximately 3% of the GDP and 14% of the country's manufacturing production in Mexican economy.

According to the International Organization of Automotive Vehicle Producers (OICA, as per its abbreviation in French), Mexico is among the top ten producers of automobiles, trucks, parts and components in the world; it is the tenth largest automobile producer and the sixth commercial vehicle producer. In addition, the organization ranks Mexico as the leading vehicle producer in Latin America.

The United States is the main market for Mexican exports, where 11 of every 100 vehicles sold are manufactured in Mexico, according to AMIA. In 2010, Mexican automotive exports reached 1.85 million cars sold abroad, representing a 52% increase compared to 2009, placing Mexico in fourth position globally, according to Global Trade Atlas.

In terms of auto parts, 2010 saw a 45% increase on the previous year, with its income reaching 60 billion dollars. Investments from the auto parts industry reached 400 million dollars, keeping Mexico as the leading auto part supplier to the United States, according to reports by the National Auto Parts Industry (INA).

Companies Established in Mexico

Companies in Mexico produce automotive vehicles to transport people and cargo, as well as manufacturing their parts and components, for both original equipment and the spare parts market.

The ten leading light and commercial vehicle assembly companies have assembly plants in Mexico. In total, in Mexico are 8 light vehicle producers, 13 heavy vehicle producers and close to 3,000 auto parts manufacturers, 345 of which are first level suppliers.

According to the Automotive Aftermarket Suppliers Association (AASA), 90 of the 100 leading auto parts companies in the world have production presence in Mexico.

Foreign Direct Investment

Mexico has consolidated as an attractive destination for investments in the automotive sector. The sector generated 30 billion dollars in income, contributed with more than 23% of the country's exports and accounted for 6% of foreign direct investment, according to data from AMIA and Business Monitor International.

Only in2010, companies such as VW, Fiat, Jatco, Daimler, Pirelli and GM announced investments for more than 4 billion dollars to manufacture complete vehicles, engines and transmissions, among others.

Strengths of the Automotive Sector in Mexico

• Competitive Costs. According to KPMG, Mexico is the best positioned nation in the auto parts manufacturing industry because of its Cost Index.

• Experience. Almost a century of tradition in this sector began in 1921 when the first automotive industry plant Mexico was established in Mexico. Nationally manufactured products have positioned the country as a platform for the development and manufacture of vehicles, parts and components of the highest and most stringent international quality standards.

• Wide Supply Network. The renowned quality of Mexico's automotive manufacturing has influenced several assembly companies to select Mexico as a unique manufacturing platform for their markets. Various models sold around the world are produced exclusively in Mexican facilities, for example, the Ford Fusion, the Lincoln Zephyr MKZ and the Volkswagen Beetle.

• Talent. According to data published by INEGI, by December 2010, 480,266 individuals comprised the automotive manufacturing industry workforce.

  

  Most Mexican engineers and technicians speak English as a second language, according to the study "Current situation and action plan to improve technology development of the automotive industry in Mexico," performed by AT Kearney, INA and AMIA.

  According to ANUIES, there are more than 790 thousand engineering and technology students in Mexico and more than 90 thousand engineering and technology students graduate from Mexican institutions every year.

• Low labor costs. Labor costs in Mexico are much lower than in other places in the world.

• Strategic Location.

  • The leading North American, European and Asian auto parts companies have established in Mexico with the purpose of ensuring "just in time" deliveries and facilitating the production flexibility required by assembly companies.

  • Mexico is located in the heart of the automotive world and is the point of convergence of the two leading manufacturing corridors of North America.