Automotive exports: record high in Mexico
Automotive exports in Mexico registered an all-time high from January to July 2023, at 105.355 billion dollars, according to Inegi data.
These sales had a year-on-year increase of 17%, and if compared to 2019, the year prior to the Covid-19 pandemic, increased 23.9%.
Automotive exports accounted for 31 percent of total foreign sales of products from Mexico.
What are the characteristics of this industry in the country? Mexico has an important mining and metallurgical industry, has local companies such as Metalsa, Vitro, Katcon, Rassini, Nemak, Sisamex and KUO, has the lowest production costs in North America, has a skilled labor force and operates a wide network of trade agreements.
In the global landscape, light vehicle production volume was 42.5 million units in the first half of 2023, up 11% compared to the first half of 2022, according to data from S&P Global Mobility.
As part of this, nearly 8 million units were produced in North America, up 12% year-on-year.
Automotive Exports
In the region, the Canadian auto parts company Magna International, with extensive operations in Mexico, reports that it relies on outsourcing by OEMs.
The extent of this subcontracting depends on several factors, including: the cost, quality and timeliness of subcontracted production relative to an OEM’s in-house production; the degree of unused capacity at an OEM’s facilities; and collective bargaining agreements and labor relations between OEMs and unions.
Currently, European and Chinese OEMs have excess vehicle assembly capacity.
In addition, since electric vehicles have fewer components than internal combustion engine vehicles, some OEMs may outsource the production of certain components or systems to maintain employment levels committed to in collective bargaining agreements and/or in connection with government incentives.
In the first half of 2023, Mexican exports of passenger cars were US$26.267 billion, a 14.6% year-over-year growth.
At the same time, Mexican exports of vehicles for the transportation of goods totaled US$18.210 billion, an increase of 6.1% year-over-year for the same periods.
