Automotive exports from Mexico totaled 139,841.6 million dollars in 2021, a growth of 13.8% year on year, reported the Inegi.
In particular, these foreign sales fell by 4.6% last December, reaching 12,592.5 million dollars.
As part of the context, the Agreement between Mexico, the United States and Canada (USMCA) includes many innovative provisions designed to encourage new investment in the North American automotive sector, to promote additional purchases of auto parts produced in the region, to create and support better-paying jobs in the auto industry, and to encourage automakers and suppliers to locate future production of new energy and autonomous vehicles in North America.
But, according to the US Department of Commerce, Mexican auto exports to the US failed to reach their pre-Covid-19 pandemic level in 2021.
From January to November 2021, Mexican exports to the US market totaled 117,431 million dollars, a drop of 7.1% compared to the same period in 2019.
A crucial factor affecting these foreign sales was the global shortage of semiconductor chips.
With the entry into force of the T-MEC, several new rules and regulations will be implemented that will guide the North American automotive industry.
Some of the new changes include, according to the Ministry of Foreign Affairs:
○ Raise regional value content (RVC) requirements to 75 percent (up from 62.5 percent under NAFTA) by 2023, with equally high content thresholds for main, principal, and ancillary parts.
○ The new provisions require that at least 70 percent of the steel and aluminum purchased and used by automakers originate in North America.
○ Eliminates NAFTA rules that allowed producers to “regard” non-North American content as originating, regardless of its origin; this will reduce free usage and help ensure auto components come from North America.
○ Introduces a labor value content (LVC) rule, the first of its kind, that requires a certain percentage of qualifying vehicles to be produced by employees earning an average of $16 per hour.