Industry profile

The Automotive Industry in Mexico

Mexico is among the world’s top 10 leading manufacturers of automobiles, trucks, auto parts and components. In 2008, over two million light and heavy vehicles were manufactured in the nation, 4% more compared to 2007. Furthermore, Mexican automobile exports for 2008 were 3% higher than the previous year.

Source: Ministry of Economy with infiormation from AMIA and ANPACT

Source: Ministry of Economy with infiormation from AMIA and ANPACT

Companies Established in Mexico

The world’s leading automotive firms have manufacturing operations in Mexico, including 8 of the top 10 light vehicle assemblers, 12 heavy vehicle manufacturers and nearly 90% of the 100 top Tier 1 auto parts producers. Over a thousand auto parts companies are established in Mexico, most of which are foreign.

Foreign Direct Investment

Mexico is an attractive investment destination in the automotive sector. Between 2005 and 2008, companies such as GM, Ford and VW announced investments of over US $7 billions to manufacture complete vehicles, engines and transmissions, among others.

Mexico's advantages

• A country with low operation costs. According to the study “Competitive Alternatives: KPMG’s Guide to International Business Location 2008 Edition”, Mexico offers much lower costs for manufacturing auto parts compared to leading automotive nations, including Japan, Germany and the U.S.

• A country with experience. Mexico has an automotive tradition that goes back nearly 100 years, since the first automotive plant in the country established in 1921.

• Deep supplier network. The main North American, European and Asian auto parts companies have plants in Mexico, guaranteeing  “just in time” deliveries and flexibility.

• A country with qualified labor:
  • Firms such as Delphi and General Motors have leading design and engineering centers in Mexico.
  • There are over 750,000 engineering and technology students.
  • Over 90,000 new engineers and technology students graduate each year from Mexican universities and institutes.
  • Mexican universities offer over 900 graduate programs in the areas of engineering and technology.

• Labor costs are lower in Mexico compared to other parts of the world.

• Productivity. According to the study “Offshoring- Onshore: Exploring México´s Manufacturing Advantages”, carried out by McKinsey consulting, the productivity gap between the US and Mexico, in terms of assembled cars per hour, decreased from 15 percent in 2005 to 8 percent in 2007.

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