Market Overview
The automotive industry continues to be the one of the most important industrial and manufacturing sectors in Mexico.
Between 2006 and 2007, the Mexican auto parts industry and vehicle production and assembly reached record production levels even after signs of economic slowdown in the principal export market in the United States.
In 2001, Mexico was the ninth largest producer of automotive vehicles in the world, manufacturing 1.92 million units (including trucks and busses), however after a slowdown in production due to economic events, it came back and grew to 1.6 million in 2005 and to over 2.1 million in 2007. Mexico surpassed the two million-unit annual production mark during 2006.
As a result of new investments in their assembly lines and the launching of innovative vehicle platforms, Ford, Volkswagen, and Nissan significantly increased their production. General Motors announced that they will start operations of their new plant in the city of San Luis Potosi in the month of April with a production of 30 automobiles per hour and could be increased to 60 units per hour by the end of 2008.
The city of Aguascalientes will be the headquarters of a plant to be built by European investors to produce hybrid and fully electric ecological cars for the Mexican and U.S. markets. This provides an extraordinary opportunity for further growth for U.S. first and second tier suppliers, and especially for providers of raw materials, technological advancement, parts, machinery, and consumable supplies.
Automotive assembly plants are now requiring their basic suppliers to be very near the plant installations so that they can reduce inventory investment and control and be able to supply just in time (JIT).
Best Prospects/Services
The greatest opportunities for automotive aftermarket parts include: collision repair parts, catalytic converters, steering wheels, gps systems, sound systems and generally all types of accessories.
In the first and second tier supply chain sector, the best export opportunities for U.S. firms are basically OEM parts and components, hybrid vehicle components, suspension systems, as well as materials, pre-assembly components such as small and progressive stampings, electronic components, equipment and specialized tooling.
Trade Shows and Events
Automotive Supply Chain Trade Mission: December 2-4, 2008;
Monterrey and Saltillo, Mexico
The United States Department of Commerce, International Trade Administration, U.S. and Foreign Commercial Service is organizing an Automotive Supply Chain Trade Mission to Monterrey and Saltillo, Mexico, December 2-4, 2008. The mission will include representatives from a variety of U.S. automotive industry manufacturers and service providers. Participants will be introduced to international agents, distributors and end-users whose capabilities are targeted to their needs in each market. They will also meet with key local industry contacts that can advise on local market conditions and opportunities. In addition to the above-mentioned services, the U.S. Commercial Service industry specialist will be on hand to discuss market trends and opportunities in Mexico. Please contact us for more information.
Market Opportunities
U.S. parts, component and equipment manufacturers will see increased export sales as global assembly plants are being relocated to Mexico. The large number of used vehicles that are constantly being imported, especially after the NAFTA decree which allows newer models, provides ample opportunities for exports of repair equipment and replacement parts. After 2009, there will be no restrictions on the importation of used vehicles.
Participation in Mexican automotive trade shows provides excellent opportunities to introduce new products and services in Mexico. For information contact the Mexico Automotive Team members listed below.
Resources
State of Jalisco Auto-parts Distributors Association
The National Association of the Manufacturers of Buses, Trucks and Tractor Trailers
National Auto-parts Industry Association
Mexican Association of Automobile Distributors
Mexican Association of Automotive Industries
National Association of Bus and Cargo Trucks Producers
National Chamber of Cargo Transports
Best Product Opportunities
The greatest opportunities for automotive aftermarket parts will still include collision repair parts, catalytic converters, steering wheels and sound systems and generally all types of accessories. U.S. parts, component and equipment manufacturers will see increased export sales to the assembly plants being established in Mexico. A larger number of used vehicles were recently authorized to be imported for personal use but not for resale. This will provide ample opportunities for exports of repair equipment and parts.
Local associations
State of Jalisco
Autoparts Distributors Association
The National Association of the Manufacturers of
Buses, Trucks and Tractor Trailers
National
Autoparts Industry Association
Mexican
Association of Automobile Distributors
Mexican
Association of Automotive Industries
National
Association of Bus and Cargo Tucks Producers
National
Chamber of Cargo Transports
Market Research
Automotive accessories are considered all of those parts that are sold to enhance the appearance of the vehicle, to increase performance, to replace original parts with up-graded luxury items such as seat covers, door and window handles, chrome plated exhaust pipes, larger sized wheels and tires, etc. for cars, pick-ups, and trucks.
Although there is a large amount of local production of these products, the majority of them are imported. The importance of this sub-sector is evidenced by the tremendous size of the annual accessories trade show, SEMA, which is held in Las Vegas, Nevada every year. SEMA exhibitors traditionally display thousands of new products in every show, and for the last several years, the greater part of exhibitors has been from Asian countries, especially China, Taiwan, and Japan. To obtain the full text of this report please contact us.
Mexico Auto Production
Mexico is currently eleventh in the world in automotive production and by 2011 will rank fifth, competing with stronger economies such as India, United States, China and Slovakia. In a report, PricewaterhouseCoopers affirms that this competition must have a sustained growth by the U.S.companies in the sector, and that they must use with better efficiency, the supplies, tradeagreements, geography and customs benefits provided by Mexican government. To obtain the full text of this report please contact us.
Mexico: Importing Used Vehicles
The Mexican government announced a change in the used car imports procedure to Mexico starting in February 2008.The new decree states that used cars may not be over 10 years old. This is because a tremendous amount of older than 10 years units were imported in 2005-2006, causing an important increase in pollution and traffic problems in major cities. From August 2005 to January 2008, 1,776,284 autos between 11 and 15 years old, and 1,073,654 ten-year-old vehicles were imported in Mexico. To obtain the full text of this report please contact us.
Carwash Business in Mexico
With 18.6 million vehicles on the road in 2005, the number of cars on Mexican roads continues to increase at a rapid rate. By 2007, the figure is expected to soar to 20.6 million. The numbers are a clear indication that the Mexican automotive sector holds tremendous potential, both for investment and US exports. To obtain the full text of this report please contact us.
Mexicans view their cars as a reflection of themselves. Therefore, car owners are obsessed with the appearance and cleanliness of their vehicles and wash them an average of 2.2 times per week. Car washing tops the list of the most commonly offered, but least professional service in Mexico. Labor and cleaning products are relatively cheap. To date, Mexico has not instituted water-recycling laws. To obtain the full text of this report please contact us.
Tijuana's Mass Transit System
Tijuana, the fastest growing city in North America, located in Mexico just across the border from San Diego, has more export manufacturing plants than any other city in the country. The municipality of Tijuana recently unveiled a proposal to reform its mass transportation system, as the current infrastructure is unable to effectively service the city’s needs. To obtain the full text of this report please contact us.
Mexico: Auto Parts & Supplies Industry
Automotive accessories are considered all of those parts that are sold to enhance the appearance of the vehicle, to increase performance, to replace original parts with up-graded luxury items such as seat covers, door and window handles, chrome plated exhaust pipes, larger sized wheels and tires, etc. for cars, pick-ups, and trucks. Although there is a large amount of local production of these products, the majority of them are imported. The importance of this sub-sector is evidenced by the tremendous size of the annual accessories trade show, SEMA, which is held in Las Vegas, Nevada every year. SEMA exhibitors traditionally display thousands of new products in every show, and for the last several years, the greater part of exhibitors has been from Asian countries, especially China, Taiwan, and Japan. To obtain the full text of this report please contact us.
Mexico DF Auto parts
Mexico presents a growing diversity of opportunities for U.S. exporters of auto parts and supplies. Due to the large-scale automotive vehicle production in Mexico and the growing aftermarket industry for auto parts, Mexico presents two sizeable and promising sub-sectors within the auto parts and supplies industry. Mexico is the world’s eleventh largest automotive producer and is forecasted to rank fifth by 2011 U.S. Commercial Service, “Automotive Manufacturing Industry.” To obtain the full text of this report please contact us.
Mexico: New Car Assembly Plant in Michoacan
The construction of a new car-assembly plant with Mexican capital has commenced in the state of Michoacan. This new project in the western part of Mexico will require diverse suppliers from the automotive industry. This investment project will have a multiplying effect on the economy. To obtain the full text of this report please contact us.
Mexico: The Automobile Industry in Jalisco
Mexico has become the 10th largest automobile exporter in the world, and the first in Latin America. The state of Jalisco, in particular, is one of the strongest in the country, with over 60 automotive and auto parts companies operating in the state. To obtain the full text of this report please contact us.
Further Information, Commments, Questions
If you wish to write us regarding these reports, please
contact:
Ernesto de Keratry
Senior Trade Specialist on the Automotive Industry Sector
U.S. Commercial Service Monterrey, Mexico
Tel.: 011-52-81-8345-2120, ext.496
Mexico Automotive Team Members
Mónica Martínez, US Commercial Service Mexico
City
Arturo Dessommes, US Commercial Service Mexico
City
Alicia Zayas, US Commercial Service Guadalajara
Mónica Rosas, US Commercial Service Tijuana