Because of the proliferation of automotive OEMs in Mexico, the manufacture of autoparts is thriving in this NAFTA partner country. This is the message that was communicated to those in attendance at Mexico Now’s Auto Industry Summit by the president of the Industria Nacional de Autopartes, A.C. (INA). The event took place in one of Mexico’s emerging automotive production centers, Leon, the capital of the State of Guanajuato early in the month of December.

The Present and Future of the Supply Chain for the production of complete vehicles, as well as autoparts manufacturing in Mexico are and will be quite bright according to the information and data that was presented in Leon. Oscar Albin’s Mexico Now presentation begins with a detailed overview as to the postion that Mexico has occupied, and will achieve over the next decade, in the world of global passenger vehicle manufacturing. In order to understand the industry dynamics, one must first know that more than eighty-one percent of production is for export. This necessitates that observers of the industry have a knowledge and understanding of the breadth and depth of Mexican free trade agreements, as well as where Mexico is situated vis a vis other automotive producing nations in terms of cost of doing business.

In order to clearly illustrate the importance of autoparts manufacturing in Mexico to the country’s overall economy, Albin presentation demonstrated that between 2011 and, projected through, 2014, average growth in manufacturing GDP has been a respectable 3.1%. Of that number, automotive manufacturing represents 8.3%, while autoparts manufacturing in Mexico accounts for 9.4% of the overall 3.1% GDP advance in manufacturing. This expanded ability to produce passenger vehicles, as well as the autoparts that they are comprised of, has been the result of an approximate forty-five billion US dollars that have been injected into the Mexican automotive sector since 1993 via foreign direct investment.

Because of the expansion in the production of both passenger vehicles and autoparts in Mexico, the country has attraced Tier 1, Tier 2 and Tier 3 suppliers from many different countries. INA reports autoparts manufacturers currently in Mexico are headquartered in (by percentage):

  • The United States 29%
  • Japan 29%
  • Germany 18%
  • France 4%
  • South Korea 4%
  • Other 19%

According to INA, automotive parts manufacturing in Mexico has increased from forty-nine billion dollars in 2005 to almost seventy-seven billion dollars in 2013. Projections are that production will continue to steadily increase, and reach ninety-six million dollars by 2019. This is according to figures generated by the Industria Nacional de Autopartes, A.C. The ten states that are most prolific in the production of autoparts on a percentage basis are:

  • Coahuila 18.2%
  • Chihuahua 14.2%
  • Nuevo Leon 10.5%
  • Mexico 7.3%
  • Puebla 6.5%
  • Guanajuato 6.3%
  • Queretaro 6.3%
  • Tamaulipas 5.7%
  • San Luis Potosi 5.3%
  • Aguascalientes 4.8%

While at the Mexico Now conference in Leon, Guanajuato, Oscar Albin also pointed out that automotive parts manufacturing in Mexico is also a significant source of jobs for the nation’s workforce. Growth in positions in the industry has been steady and is projected to continue to be so. According to numbers reported by the Industria Nacional de Autopartes, A.C., the number of Mexican workers making parts for incorporation into OEM and aftermarket products in 2008 was approximately four hundred and twenty-five thousand. This figure rose to about 638,000 by the end of 2013. It is estimated that, by 2019, almost 780,000 workers will be employed in automotive parts manufacturing in Mexico.

LINK BELOW TO PRESENTATION:

Autoparts Manufacturing in Mexico