News, Insights and Best Practices for Manufacturing in Mexico

The Mexican Automotive Industry is Quickly Growing

15 Aug 2014

Category: Automotive Manufacturing, Manufacturing in Mexico

In the first seven months of 2014, Mexico's production of cars and light trucks grew 7.5 percent to about 1.86 million vehicles, compared to the same time the previous year, The Wall Street Journal reported. Compared to Brazil's once robust automotive sector that has depreciated by 17 percent to just 1.7 million. Currently, according to Fox News Latino, Mexico is the world's fourth-largest exporter of automobiles. It recently became the No. 1 exporter of automobiles to the U.S.

The difference in performance has to do with each country's policies. While Mexico exports the majority of its vehicles, Brazil sells about 85 percent of its units to Brazilians, and most exports are delivered to neighboring Argentina. With recent economic troubles in Argentina, Brazil's exports have decreased.

Now, more international automakers and suppliers are considering manufacturing in Mexico. Experts predict car and light truck production should grow to 4 million by 2020. Currently, the automotive industry in Mexico represents 20 percent of Mexico's manufacturing production and 26 percent of its exports, according to Mexican President Peña Nieto.

Recently, Nissan opened a facility in Mexico and BMW announced its plans to build an assembly plant in the country as well, Fox News Latino reported.

In an interview with the news source, Eric Farnsworth, vice president at the Council of the Americans in Washington, D.C., denied accusations that manufacturing in Mexico takes away jobs from the U.S.

"Because of integrated supply chains, up to 40 percent of the content of the products Mexico exports comes from the U.S.," Farnsworth said. At the same time, he added, people don't necessarily just think of Mexico as an assembly country any more. With its growing numbers of engineers, more design work is taking place within the country's borders. 

The integrated partnership Mexico has with the rest of North America is an essential part of the Mexico automotive success, compared to Brazil's connections with countries that aren't as big economic giants.

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