It is expected that, by 2015, the automotive sector will
double the number of direct and indirect jobs it currently
generates. The projected market growth for auto parts is
between seven and 10% by the end of 2012, the final figures
have yet to be released.
There are many contributing factors which play a
significant role in the success of the Mexican automotive
industry. There is ample installed production capacity which
continues to grow as the major multinational manufacturers
continue to invest. In the central and northern regions of the
country there are 13 large supplier clusters which have a
significant base of both local and international parts
suppliers.
Skilled labour is readily available in Mexico, and at a
substantially lower cost than in competitive countries.
Additionally, high-tech production systems have the
necessary flexibility for simultaneous assembly of a range of
models.
Mexico’s geographical location is ideal for exports to
North America and offers considerable cost savings in time
and transportation. The country also benefits significantly
from the commercial treaties signed with the US and Canada
(
the North American Free Trade Agreement), the European
Union and Japan as well as several countries in Central and
South America.
One of the threats to Mexico’s continuing success as an
automotive exporter is also a source of opportunity.
Currently, the United States is by far the leading destination
for Mexican exports and, were there to be a slump in US
consumption, the implications for Mexico could be severe.
There is, therefore, a need to diversify export destinations and
to identify new market opportunities in a variety of areas, not
just finished vehicles.
Whilst exports and domestic sales have grown
significantly, despite the international economic crisis.
Mexico has also sought to increase its participation in the
global market. In 2008, 71% of the industry’s exports were
shipped to the US, in 2011 only 64% of Mexico’s auto exports
were destined for that country. While the US remains the
main destination for exports from the Mexican automotive
sector, Canada with 7% and Latin America 15% – mainly to
Brazil, the fourth largest consumer of vehicles in the world –
have currently become important trading partners for the
country.
Mexican automotive production is at an all-time high and
forecast to increase significantly over the next few years. The
Detroit Big Three, Ford, General Motors and Chrysler, are all
expanding capacity at their existing plants and Mazda, Nissan
and Honda have announced plans for new factories to be
built by 2014. Audi is also planning to build its first plant in
North or Central America in Mexico by 2016.
Audi AG, a Volkswagen group company, has said that it
will invest approximately $2 billion in its first SUV plant in
Mexico as part of its strategy to compete against rivals BMW
and Mercedes Benz. The expected arrival will increase the
competitiveness of the company and, to a large extent, bring
it closer to its goal of selling two million cars by 2020. The
location of the plant will be announced in the coming months
but it is worth noting that, despite having the option to
install its plant in other countries like the US, the German
company is betting on Mexico.
These investments confirm the evolution and relevance of
the Mexican automotive industry. Companies in the sector
worldwide recognise that Mexico offers excellent
infrastructure, competitive costs, world-class manufacturing
and a long tradition and experience within the sector.
The challenge for the automotive supply chain concerns
the availability of sufficient transportation capacity to handle
the increased exports from Mexico to the United States. In
2011,
just under 3.5 million vehicles were produced in
Mexican plants and the forecast is for an additional 2.2
million units over the next few years.
73