By Elenne Castro
It is expected that by 2023, the auto parts industry in Mexico will close with 108,874 million dollars. This amount would represent an increase of 2.0 percent7% compared to the previous year. In 2024, another historical maximum could be reached by exceeding 110.468 million dollars (mdd), according to Alberto Bustamante, general director of the National Auto Parts Industry (INA).
He estimated that the production of auto parts in Mexico would reach a historical record at the end of 2022, with a figure of 106.665 million dollars. This milestone in the Mexican auto parts sector represents a growth of 12.65 percent compared to 2021, when the industry achieved 94,778 million dollars. It is of note that this amount also exceeded the pre-pandemic figure, which reached 97,228 million dollars in 2019.
The country broke its historical record with the high production generated in 2022. The high rate is due to the inventories of vehicles sold and manufactured throughout North America and the US-China trade war, which forces Asian companies to lose business or settle in Mexico.
Another factor is the increase in the value of regional content to comply with the rules of origin of the treaty between Mexico, the United States, and Canada (T-MEC). These rules encourage nearshoring and reshoring.
On the other hand, the INA announced that, at the end of last year, the number of direct jobs generated by the industry was more than 879,000 people, which implies a growth of 5.2 percent in relation to the values observed in 2021. It is also a historical record of job offers in the field.
Due to Mexico’s export profile, the automotive trade balance generated a surplus of around 100 billion dollars at the end of 2022, representing a balance more significant than the registered sum of remittances, the tourism balance, and oil.
Of note is that the North Zone of the country represents 52% of auto parts production, while the Central Zone covers 45.6 percent. The states contributing the most to this industry are Coahuila (16.5 percent), Chihuahua (12.1%), Nuevo León (11.6 percent), Guanajuato (10.9 percent), Querétaro (6.9 percent), State of Mexico (6.4 percent), and Puebla (6.1 percent).
Regarding direct foreign investment (FDI) of auto parts in Mexico, phenomenal investment relocation and competitive advantages provide an ideal climate for auto parts manufacturing in Mexico. For this reason, countries like the United States, Japan, Germany, Canada, and Spain are betting on settling in this region of North America, choosing states such as Nuevo León, Chihuahua, Guanajuato, Coahuila, Tamaulipas, Mexico City, San Luis Potosí, Jalisco, and Durango.
*This excerpt is published by authorization of Mexico Industry, to keep reading please visit the link:
https://mexicoindustry.com/noticia/produccion-de-autopartes-alcanzaria-108874-mdd-en-2023
