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Mexico operates 130 automotive plants with Canadian capital

More than 60 Canadian companies operate in Mexico with more than 130 automotive plants in 14 states, employing some 30,000 Mexicans, according to information from the Canadian government.

Canada and Mexico are not only part of the United States-Mexico-Canada Agreement (USMCA), but both are members of the Trans-Pacific Partnership Agreement (CPTPP), the OECD, the G-20 and the WTO.

With a broad industrial base, Mexico exported automotive products worth 165.232 billion dollars, which represented an increase of 18.2% over 2021, according to Inegi data.

Automotive plants

Canadian auto parts company Magna International refers that Original Equipment Manufacturers (OEMs) have manufactured their vehicles in the regions where they are mainly sold and, as a result, many of them have established manufacturing plants in several countries.

Since OEMs often use lean manufacturing and supply chain management techniques in their operations, many Tier 1 supplier facilities are often located relatively close to OEM facilities to reduce the cost and risks associated with longer supply chains.

The two countries have active and sustained collaboration in numerous forums, with a mutual commitment to multilateralism and specifically to the multilateral trading system.

Global industry

China, Europe, North America, Japan, India and South Korea represent the world’s largest automotive production markets, accounting for approximately 90% of the vehicles produced worldwide.

In particular, local demand for vehicles in China, India and certain markets outside North America and Western Europe has increased over time.

Growing local demand has helped boost the local automotive industry in these countries and has attracted manufacturing investments from North America, Europe and Asia-based automotive producers through stand-alone investments and/or joint ventures with local partners.

In the case of China, the increasing migration of component and vehicle system design, development and engineering, especially for battery electric vehicles, is expected to further benefit the automotive industry in that market.

OEMs produced over 77 million light vehicles in 2021, a slight increase over 2020 production, but significantly below pre-pandemic levels (91 million in 2019).

 

Redacción Opportimes