Global Opportunities

Opportunities in the Mexican Automotive Industry

In recent years, Mexico has become a key destination for investment in several industries, but the Automotive is one of the most important for the Mexican Economy, accounting for the 3.1% of the country’s GDP and 18.3% of its manufacturing GDP in 2016.

Competitive costs and wide experiences are two advantages of the Mexican automotive industry
Competitive costs and wide experiences are two advantages of the Mexican automotive industry

Mexico is one of the world’s leading providers and exporters of both vehicles and auto parts. According to the Mexican Automotive Industry Association (AMIA), the Automotive Industry hits a record in high production in 2017, retaining in this way, its position as the seventh main light vehicle manufacturer globally, the largest manufacturer in Latin America and the 9th largest exporter in the world. Mexico’s most recent exports are led by cars, representing 8.63% of the total exports, followed by vehicle parts, which account for 7.07%.

Mexico is home to 90 of the 100 largest auto parts companies in the world and 21 of the major vehicle manufacturers in the world. Brands like Volkswagen, Toyota, Audi, BMW, Ford and Kia have presence in 14 Mexican states.

Despite the uncertainty and the politic and economic challenges Mexico is facing, the Automotive Industry remains strong and growing precipitously every year. It is expected that by 2020, the Mexican Automotive Industry will produce nearly 5 million light vehicles.

Strengths of the Automotive Industry in Mexico

The Automotive Industry represents one of the most dynamic and competitive Industries in Mexico due to several factors:

  • Competitive costs
  • Excellent communication infrastructure
  • Strategic location
  • Wide experience (the first automotive plant was established in 1921)
  • Qualified labor force (according to INEGI, 901,419 people were employed by the Automotive and Auto parts manufacturing Industries in 2016).

Business opportunities

Mexico has an open market, which offers diverse opportunities for international suppliers and Foreign Direct Investments to support its industry rapid development. Due to North America Free Trade Agreement uncertainty, Mexico is looking forward to diversifying its foreign trade to keep the Mexican Automotive strength. The Mexican Industry has evolved precipitously and nowadays it is very interested in addressing its main areas of opportunity, which include obtaining more specialized equipment for advanced manufacturing operations. This is an important opportunity for the Swiss Industry since the “Swiss brand” is well-known by its high quality and innovation.

Due to the size of the Automotive Industry in Latin America and worldwide, Swiss Exporters and Investors, need to be aware of the importance of doing business in Mexico, as the growth of the Mexican Industry represents a big opportunity.