Exports of auto parts from Mexico to the US fall 1.5%
Mexico recorded exports of auto parts to the United States worth 15,138 million dollars in the first quarter of 2020, a year-on-year drop of 1.5%, according to figures from the United States Census Bureau.
Original Equipment Manufacturers (OEMs) have historically built their vehicles in the regions where they are primarily sold, and as a result, many OEMs have established manufacturing facilities in various countries.
Since OEMs often use lean manufacturing techniques and supply chain management in their operations, many Tier 1 supplier facilities are relatively close to OEM facilities to reduce the cost and risks associated with supply chains longer supply.
Mexican exports of auto parts to the United States maintained a continuous growth during the last 10 years at interannual rates, reaching 61,682 million dollars in 2019.
Of all Mexican auto exports to the US market in the past year, auto parts accounted for 45.1 percent.
Auto parts exports
According to the Canadian company Magna International, the global auto industry is cyclical and sensitive to a wide range of macroeconomic and political factors.
While the global industry had been in the growth phase of a cycle, which started in 2010, production volumes declined in some key automotive production regions of the world in 2019.
Some of the macroeconomic and political factors that currently appear to have a negative effect on the industry as a whole include: changing economic conditions; impact of the COVID-19 pandemic; accelerated focus on the impact of climate change; increasing location of production; and an uncertain commitment to multilateral trade, as well as tariffs and trade wars in some of the key markets.
