Mexico is a major market for U.S. passenger vehicles, light vehicles, trucks, buses, auto parts, and supplies. The automotive sector is one of Mexico’s most significant industries, comprising 3.5 percent of the nation’s GDP, 20 percent of the manufacturing GDP, and employing over one million people nationwide.

Overview

Mexico is the seventh-largest global passenger vehicle manufacturer, producing approximately three million vehicles annually. Ninety percent of vehicles produced in Mexico are exported, with 76 percent destined for the United States. Established automakers in Mexico include Audi, Baic Group, BMW, Stellantis (made up of FCA and PSA Group), Ford, General Motors, Honda, Hyundai, Jac by Giant Motors, Kia, Mazda,Mercedes Benz, Nissan, Toyota, and Volkswagen.

Mexico is the sixth-largest manufacturer of heavy-duty vehicles for cargo, hosting 14 manufacturers and assemblers of buses, trucks, tractor trucks and engines. These producers maintain 11 manufacturing plants that, supporting  more than 24,000 jobs nationwide. Mexico is the leading global exporter of tractor trucks,  95.1 percent of which is destined for the United States. Mexico is also the fourth-largest exporter of heavy-duty vehicles for cargo, and the second-largest export market after Canada, for U.S. medium and heavy-duty trucks. Top players include Cummins, Detroit Diesel Allison, Freightliner–Daimler, Kenworth Mexicana, Mack Trucks de México, International-Navistar, Dina Camiones, Scania, Volvo Group VW, Man Truck & Bus, Mercedes-Benz, Hino Motors, and Isuzu Motors.

Automotive manufacturers are primarily concentrated in the northern region of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, and San Luis Potosí. Original equipment manufacturer (OEM) plants are also based in Guanajuato, Aguascalientes, Jalisco, Estado de Mexico, Hidalgo, Morelos, Puebla, and Veracruz. In terms of supply chains, auto parts producers are located close to these plants, principally in Coahuila, Chihuahua, Nuevo León, Guanajuato, Queretaro, Puebla, Tamaulipas, and Estado de Mexico, although they are found in other parts of the country as well. The heavy-duty vehicle manufacturing plants are mainly concentrated in northern Baja California, Coahuila, Nuevo León, Sinaloa, San Luis Potosí, Guanajuato, Querétaro, Hidalgo, Veracruz, and Estado de Mexico.

The United States–Mexico–Canada Agreement (USMCA), which went into effect on July 1, 2020, included a number of changes to the rules of origin for the automotive sector. The USMCA requires that 75 percent of a vehicle’s content (70 percent for heavy trucks) be produced in North America, and that core auto parts originate from the United States, Canada, or Mexico. Following a phase-in period ending in 2023 for vehicles and 2027 for trucks, only goods meeting these content requirements will receive duty-free access. For additional information, please visit the Office of United States Trade Representative (USTR) website or see USTR’s USMCA U.S Automotive Sector Impact Analysis.

The USMCA requirements for the automotive industry are likely to provide new business opportunities for U.S. exporters with local OEMs and other suppliers in Mexico looking to increase the percentage of inputs in their supply chains from North American sources. The U.S. Commercial Service Mexico has prepared a helpful guide, which provides information on the USMCA and its implications for the auto sector. To access this report and other useful USMCA information, please visit USMCA  website.

*Total market size = (total local production + imports) - exports
Source: Mexican Automotive Industry Association (AMIA)  and ITA – Office of Transportation and Machinery.

*Local production was provided by the INEGI – The National Institute of Statistics and Geography  with figure in U.S. Dollars. There are no estimate statistics available for 2022.
Sources:  INEGI – The National Institute of Statistics and Geography and ITA, Office of Transportation and Machinery

Mexico is the largest export market for U.S. automotive parts and the fourth-largest producer of automotive parts worldwide generating USD 94 billion in annual revenues. The size of Mexico’s passenger vehicle market and the shared border between the United States and Mexico generates a robust demand for U.S. OEMs and aftermarket auto parts.

The most effective way for U.S. suppliers of auto parts and equipment to enter the Mexican market is through local representation or regional distribution. Assembly plants prefer suppliers who are located close by to minimize inventory volumes and to facilitate just-in-time or just-in-sequence deliveries. It is easier to serve OEMs in Mexico if the U.S. exporter is already supplying them in the United States and has a supplier number. Automotive parts related to components for Tier 2 suppliers represent the most exported items from the United States. However, opportunities exist for production machinery and equipment, materials, pre-assembled components, cold forging, aluminum die casting molds, molds, tooling, cutting tools, automation process equipment, raw materials, engineering and design, finished parts, and accessories sold through local representatives or distributors.

As automotive technology becomes more sophisticated, Mexico will search for solutions including big data, wireless technologies, electrification, and innovation. U.S. exporters that also support their own design, engineering, and development of product lines are in better position to serve automotive market customers and others in the advanced manufacturing sector.  The main competition for original equipment parts is from domestic manufacturers, as well as from China, Japan, South Korea, Germany, Canada,  among other countries.

*Total market size = (total local production + imports) - exports
Source: National Auto Parts Industry Association (INA) and ITA, Office of Transportation and Machinery

Leading Sub-Sectors and Opportunities

There are six major sub-sectors in Mexico’s automotive industry: original equipment (OE) parts, aftermarket parts, electric and hybrid vehicles, specialty equipment, and remanufactured products. Of these sub-sectors, the U.S. Commercial Service Mexico sees strong opportunities in OE parts, aftermarket, and electric vehicle (EV) parts. To learn more about these opportunities, please refer to the web resources below.

Resources

Events

Automotive Meetings (OE market), June 21-23, 2022, Queretaro, Mexico (biannual) 

INA Paace Automechanika (OE/Aftermarket/Accessories), July 13-15, 2022, Mexico City  

Expo Transporte (Transportation and Buses), October 5-7, 2022, Puebla, MexicoContacts

 

For further information on the automotive sector in Mexico, please contact:

Monica Martinez        

Commercial Specialist

U.S. Commercial Service—Mexico City

Tel: +52 55 5080-2000, ext. 5218

Monica.Martinez@trade.gov