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Mexico’s Automotive Sector

Mexico’s Automotive Sector. May 2007. Prepared by: Office of Representation of Mexico’s Secretary of Economy in Japan Mexico-Japan Economic Partnership Agreement Embassy of Mexico Email: comunicatokio@economia.gob.mx , Tel. 3506-6681. Mexico’s Automotive Sector.

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Mexico’s Automotive Sector

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  1. Mexico’s Automotive Sector May 2007 Prepared by: Office of Representation of Mexico’s Secretary of Economy in Japan Mexico-Japan Economic Partnership Agreement Embassy of Mexico Email: comunicatokio@economia.gob.mx, Tel. 3506-6681

  2. Mexico’s Automotive Sector Mexico’s annual vehicle production • Mexico’s automotive industry is one of the country’s most important sectors in terms of FDI, exports, and employment • Mexico is one of the top ten global manufacturers of vehicles • In 2006, Mexico produced 1,978,771vehicles • During the first four months of 2007, Mexico produced 597,382 automobiles Number of Vehicles Source: Mexican Association of Automotive Industry (AMIA)

  3. FTA Japan NAFTA FTA Honduras El Salvador and Guatemala FTA Colombia FTA Nicaragua FTA European Union FTA Costa Rica CEA – Brazil FTA Israel FTA Bolivia FTA Chile FTA Uruguay CEA – Argentina Mexico: Among the World’s Top Ten Countries in the Production and Exports of Automobiles FTA EFTA Automotive products and finished vehicles produced in Mexico are exported to more than 30 countries, including Japan, under preferential market access through Mexico’s FTA network

  4. Mexico’s Automobile Exports • In 2006, Mexico exported 1,536,768vehicles, a 29.5%increase from the previous year • From January to April 2007, Mexico exported 449,338 vehicles Number of Vehicles Source: Mexican Association of Automotive Industry (AMIA)

  5. Mexico’s Autopart Industry • The autopart industry in Mexico comprises approximately 350 companies in the Tier 1 category. About two thirds of those companies are foreign owned • Mexico needs to expand its manufacturing base in Tier 2 and 3 suppliers. The Mexico-Japan EPA represents an opportunity to Japanese autopart companies in Mexico’s growing automotive manufacturing sector

  6. Tier 1 Tier 2 Tier 3 Structure of Mexico’s Auto Parts Industry 14 companies Assemblers Air Conditioning, Engine Components, Steering, Suspension, Logistics, Die Casting & Molding, Electronic Components 7.0% of Total Manufacturing GDP 8.1% of Total Manufacturing Exports Total Production: 1.677 Billion Dollars (Estimated, 2004) 345 companies (mostly foreign) Approx. 1,000 companies (About 30% are domestic) Casting Components, Press, Plastic, Aluminum, Logistics, Bearing, Machining, Die Casting & Molding, Machine Tools Parts Suppliers Source: INA (Mexico’s National Industry of Autoparts)

  7. Strengthening of Mexico’s Support Industries Mexico’s Ministry of Economy Fosters the Formation of Supporting Industries in the Auto Parts Sector Strategic Alliances between Japanese SME’s and Mexican companies to become suppliers Strengthening Mexican Small and Medium Enterprises Formation of Mexico-Japan Supply Chain Win-Win Business Opportunities Strengthening Competitiveness of Japanese Companies in Mexico

  8. Mexico’s Exports of Autoparts Motor Vehicle parts imported by the US in 2006 • According to the US Department of Commerce, in 2006, Mexico was the US largest supplier of motor vehicle parts • In 2006, Mexican exports of motor vehicle parts to the US totaled 21 billion dollars, an increase of 7.4% from a year earlier Million USD Source: US Department of Commerce

  9. MEXICO TOTAL VEHICLE SALES 2005, 2006 and 2007 Source: Mexican Association of Automobile Dealerships (AMDA)

  10. MEXICO TOTAL VEHICLE SALES, EXPORTS AND PRODUCTION 2004, 2005, 2006 and 2007 Source: Mexican Automotive Manufacturers Association (AMIA)

  11. Production of Japanese Car Companies Manufacturing in Mexico In 2006, Japanese car companies were responsible for 24% of Mexico’s total production Source: Mexican Automotive Manufacturers Association (AMIA) * Automobiles

  12. Retail Sales of Japanese Car Companies in Mexico In 2006 Japanese automotive companies sold 366,472 vehicles in Mexico, increasing to 32% their market share in the Mexican car market Source: Mexican Automotive Manufacturers Association (AMIA) * Automobiles ** New entrants in Mexico as a result of the EPA quota system

  13. Exports of Japanese Car Companies Established in Mexico In 2006, Japanese car companies manufacturing in Mexico accounted for 15.2% of the country's automobile exports Source: Mexican Automotive Manufacturers Association (AMIA) * Automobiles

  14. Mexico-Japan Economic Partnership Agreement • The EPA has also contributed to the establishment of four new Japanese companies in Mexico that are now selling vehicles in the domestic market: Mazda, Isuzu, Subaru and Suzuki . In late 2007, Hino motors will start commercialization of trucks in Mexico. • For fiscal year 2007 (April 2, 2007 to March 31, 2008) the EPA has allocated a quota of 56,844 vehicles to be imported to Mexico from Japan.

  15. Import Quota for Japanese Car Manufacturers (General Tariff will be eliminated in April 2011) (Unit: vehicles) *1) Car manufacturers that produce in Mexico are given quotas for units equivalent to 10% of its annual production*2) EPA quotas are given for units equivalent to 5% of the total sales in the previous year*3) Mitsubishi uses quotas allocated to Daimler ChryslerSource: Mexico’s Secretary of Economy

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