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Mexico auto parts exports reach pre-Covid-19 levels

Exports of auto parts from Mexico to the United States practically reached pre-Covid-19 levels in the period from January to August 2021.

During those eight months, external sales of automotive parts from Mexico to its northern neighbor were for 41.540 million dollars, a reduction of 0.4% compared to the same period of 2019.

Among the companies that manufacture auto parts in Mexico are Bosch, Magna, Hitachi Automotive Systems, Delphi, Michelin, Lear, Johnson Controls and Denso.

Auto parts exports

NAFTA’s requirements of 62.5% North American content for motor vehicles and 60% for all other vehicles and automotive parts were adjusted under the T-MEC.

Although with a transition period, the new rules require that 75% of a motor vehicle and 70% of its steel and aluminum originate in North America and that 40% -45% of the content of automobiles be made by workers who they earn at least $ 16 an hour.

Exports of auto parts from all origins to the US market totaled 107.748 million dollars from January to August 2021, an increase of 2.1% compared to the same period in 2019.

The automotive sector is the most integrated in North America, with intraregional exports of 236,000 million dollars in 2020 and a fall in that indicator of 21.5% year-on-year, according to data from the United States Department of Commerce and the World Trade Organization. (WTO).

Integration

According to data from the Department of Commerce, Mexico is the largest export market for automotive parts in the United States and the fifth largest producer of automotive parts worldwide with 78,000 million dollars in annual revenues.

Both the size of Mexico’s passenger vehicle market and the shared border between the United States and Mexico provide a strong market for US original equipment manufacturers and aftermarket auto parts.

Also according to the Commerce Department, the most effective way for US auto parts and equipment suppliers to enter the Mexican market is through local representation or regional distribution.

Assembly plants prefer nearby suppliers to minimize inventory volumes and facilitate just-in-time or just-in-sequence deliveries.

It is easier to serve OEMs in Mexico if the US exporter is already supplying them in the US and has a supplier number.

 

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