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Auto industry fuels Mexico’s economy

January 2, 2022
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Why this is important to Wisconsin businesses: Wisconsin is an important supplier of equipment and components for the auto industry.

The automotive industry is one of the most dynamic industries in Mexico.  It involves not only the purchase and sale of vehicles but also their production and the generation of raw materials needed for the manufacturing process.

Until the COVID-19 pandemic, Mexico’s auto industry had expanded steadily over the last 20 years, propelled primarily by two factors: Increased exports to Canada and the U.S., and the entry of a large number of multinational automotive companies and their suppliers.

Most of the major car companies in the world are currently manufacturing vehicles in Mexico. The country has transformed into an automotive production powerhouse, with large carmakers such as GM, Ford, Nissan, VW, Fiat Chrysler, Toyota, Honda, KIA, Audi and BMW making vehicles in Mexico. Also, dozens of suppliers to the automotive industry have opened plants in Mexico, such as TRW, Delphi, Bosch, Eaton, Michelin, Dana and American Axle.

In 2017, 4.2 of every 100 vehicles produced in the world were assembled in Mexico. That year, the country manufactured 4.1 million motor vehicles, an increase of 13% over the previous year. Now, there are 20 production complexes of light vehicles and engines in 12 states in Mexico, 11 heavy vehicle and diesel engine assembly plants in eight states, and auto parts companies in 24 states.

By 2018, Mexico became the sixth-largest vehicle producer in the world, the No. 1 producer in Latin America, the fourth-largest exporter worldwide, and the top exporter to the U.S.

The automotive industry represented 3.7% of Mexico’s gross domestic product (GDP) in 2017 and 20% of the manufacturing GDP. According to figures from the Mexican Association of the Automotive Industry, Mexico manufactures 23% of the vehicles produced in North America. The U.S. is the main export market for Mexico. The recent renegotiation of the commercial agreement among Mexico, the U.S. and Canada has presented greater opportunities for collaboration within the manufacturing sector, as well as the need to develop new suppliers, providing an opening for auto industry producers in Wisconsin and around the U.S.

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