ProMéxico MIM


The Automotive Industry in Mexico

In 2015, Mexico was positioned as the seventh largest producer of vehicles in the world and the largest producer of light vehicles in Latin America, surpassing Brazil with more tan one millon units. During that year, the production and export of light and heavy vehicles established a new high record in the country. It is important to note the growth that Mexico has experiences as an international vehicle producer, overtaking France and Spain, countries with a long tradition in the automotive sector.

In 2015, the terminal automotive industry grew in three significant areas: the domestic market, exports and production. That year, the automakers and auto parts industries accounted for approximately 3% of the country's GDP and 18% of its manufacturing GDP.

Light vehicle production grew by 5.6%, going from 3.2 million units in 2014, to 3.4 million in 2015, hitting a new record for assemblers in Mexico. On the other hand, the heavy vehicle industry recorded a 13.1% increase in production, with 190,978 units.

Mexico is a producer of vehicles of great quality and innovation. Vehicles made in Mexico comply with high standards and are sold in the most demanding and competitive international markets.

Mexican vehicle exports in 2015 reached 2.8 million units, a 4.4% increase compared to 2014.

While the United States continues to be the leading export market for Mexican cars and trucks, it is not their only destination, as Mexican vehicles are also exported to Europe, which in recent years has increased its share in Mexican exports. In 2014 and 2015, the number increased to 145,263.

Companies Established in Mexico

Mexico's automotive and auto parts industries have been boosted by the arrival of vehicle assemblers (light and heavy) from around the world, such as: Audi, BMW, Fiat-Chrysler, Ford, General Motors, Honda, Kia, Mercedes-Benz, Nissan, Toyota, Volkswagen and Volvo. There are a total of 23 companies production complexes in 14 Mexican states, engaged in activities that range from assembly and bullet-proofing to vehicle and engine casting and stamping. More than 50 car and light truck models are currently produced in Mexico.

Most assemblers in Mexico have auto parts companies located near their plants to satisfy supply and delivery time demands.

Mexico offers assemblers high manufacturing capacity as well as the design and production of models to the highest quality standards and which are sold in markets with the highest demand. These are some examples:

• One of the leading car production plants in North America are in Mexico: Nissan Aguascalientes, which manufactured more than half million units in 2015.

• Mexico went from an exporter of simple manufacturing to an innovation generator. There are more than 30 automotive design centers in the country.

• With recent investment announcements of Audi, BMW, Mercedes Benz and Infiniti, Mexico has been positioned as an important country in the manufacture of luxury vehicles.

• According to Ward’s Automotive, two engines assembled in Mexico have been included in the "Top Ten Engines" for 2015.

  • The first is Volkswagen's 1.8 liter TSI Turbocharged. The engine is assembled in VW's plant in Silao, Guanajuato and is used in the Jetta, Beetle, and Passat models.
  • The second is the engine OHV supercharged 6.2-liter Hemi V-8 assembled in Saltillo, Mexico and equipped Dodge Charger SRT models Hellcat.

• During the Auto Show in Detroit 2015, the Golf GTI was announced as the winner of the North American Car of the Year, beating the Ford Mustang and Hyundai Genesis.

Attraction of Foreign Direct Investment

Mexico's automotive and auto parts industries accounted for 19.9% of total foreign direct investment (FDI) in 2015. According to the Secretariat of Economy, the terminal automotive industry attracted 6,388 million dollars in 2015. Accumulated FDI in the terminal automotive and auto parts industries in the 2009-2015 period was 26,162 billion dollars.

Strengths of the Automotive Industry in Mexico

  • Competitive Costs. According to the KPMG study Competitive Alternatives 2016, compared with the US, Mexico offered a 12.3% savings in manufacturing costs of parts, 9.8% in precision components, 15.2% in plastic supplies and 16.3% in metal components used industry.

  • Experience. The first automotive plant was established in Mexico in 1921; that shows Mexico's long tradition in this industry. Products made in Mexico have positioned the country as a platform for vehicle, part and component development and manufacture with the highest and strictest international quality standards.

  • Wide Supply Network. The renowned quality of Mexican automotive manufacturing has enabled several assemblers to choose Mexico as the sole manufacturing platform for their markets. Many models sold around the world are produced exclusively in Mexican plants, for example, the Ford Fusion, Lincoln Zephyr MKZ and Volkswagen Beetle.

  • Talent. According to data published by INEGI, 875,383 people were employed by the automotive and auto parts manufacturing industries as of December 2015.

    Most engineers and technicians in Mexico speak English as a second language, as reported in the study "Situación Actual y Plan de Acción para Mejorar el Desarrollo Tecnológico del Sector Automotriz en México" by AT Kearney, INA and AMIA.

    According to National Association of Universities and Institutions of Higher Education's data, 115 thousand engineering and technology students graduated annually from Mexican institutions. From UNESCO's 2014 data, in Mexico there are 26% more graduates in manufacturing, engineering and construction per capita than in the United States.

  • Strategic Location.

    • The leading auto parts companies from North America, Europe and Asia have established in Mexico to ensure "just-in-time" deliveries and increase the production flexibility required by assemblers.
    • Mexico is located at the heart of the automotive world, where the two leading manufacturing corridors of North America converge.