Mexico rises to fourth place in the world as a producer of auto parts

Mexico managed to position itself as the fourth world producer of auto parts, surpassing the figures achieved by Germany in this subsector last year. At the end of 2021, Mexico produced 94.778 million dollars (million dollars) in auto parts, while the German country added 87.224 million dollars, highlighted Alberto Bustamante, general director of the National Auto Parts Industry (INA).

It is the first time that Mexican production in this sector exceeds that of Germany, a reflection of the technological change that Europe is undergoing to supply the growing electric car industry, the expert considered.

“The low-cost [European] countries are in Eastern Europe, that's where the latest investments in auto parts plants and components for new technology vehicles are located. [...] We are seeing how German manufacturers, mainly focused on internal combustion vehicles, are being affected by technological change”, said the director of the INA.

NORTH AMERICA

Alberto Bustamante considered that these trends are not affecting Mexico, because, unlike Europe, which is relocating its supply to the East of the Continent, or Asia, which has several countries for low-cost production, such as Taiwan, Vietnam and even China, North America only has Mexico for low-cost manufacturing.

This thesis is supported by the production numbers of auto parts in the region. They warn that both the US and Canada reported, in January of this year, figures below those obtained in 2021.

The first registered 16,973 million dollars for the production of auto parts (9% less than last year), while Canada achieved 2,268 million dollars, seven percentage points below what was achieved in 2021.

Mexico, for its part, reached 8,154 million dollars for the production of auto parts in the aforementioned month of 2022, 4.8% above what was obtained in January 2021.

“Canada has been decreasing its production and this is practically due to the migration that Canadian companies are making to the south of the United States, but mainly to the Bajío and North of our country. This is very important and here we have to follow Canada very closely, because those percentages that it stops producing will be reflected in the increase in the production of auto parts made in Mexico,” Bustamante said.

At the end of 2021, the US closed its auto parts production at 228,263 million dollars, 12.35% less than that achieved in 2019, when it obtained 260,451 million dollars; Canada, for its part, obtained 26,512 million dollars from auto parts last year, 18.13% less than in 2019, when it added 32,386 million dollars.

Mexican production is closer to its pre-pandemic figures, closing 2021 with 94,778 million dollars, only 2.5% down from 97,228 million dollars in 2019. The forecast is that Mexico will achieve 100,714 million dollars from auto parts production at the end of 2022.

Source: Mexico Industry