Automotive Parts and Supplies

An Expert's View about Automobile in Mexico

Posted on: 30 Jun 2012

Mexico ranks as the 8th largest vehicle producer in the world, and the automotive sector accounts for 17.6 percent of Mexico’s manufacturing sector.

Automotive Parts and Supplies A Top Export Prospect for Mexico June 2012 Auto Parts Production for OEM and Aftermarket 2009 2010 2011 2012 (est.) Total Market Size 58.6 69.4 80.2 80.8 Total Local Production 41.2 57.5 66.9 68.0 Total Exports 35.9 37.9 45.1 45.9 Total Exports to the US 32.31 27.7 40.2 41.1 Total Imports 18.5 26.0 31.8 33.1 Total Imports from the US 10.36 16.9 18.4 18.2 Figures in USD billions. Source: National Auto Parts Industry Association (INA) Total Number of Vehicles – Automobiles and Trucks 2009 2010 2011 2012 (est.) Total Units Produced 1,507,527 2,260,774 2,557,550 2,791,292 Total Units Sold in Country 754,918 820,406 905,886 990,175 Total Units Imported 730,000 848,000 873,440 898,440 Total Units Exported 1,223,333 1,859,517 2,143,879 2,427,879 Figures in units. Source: Mexican Association of Automotive Industry (AMIA), Secretary of Economy and estimates from Business Monitor International Total Value Vehicles – Automobiles and Trucks 2009 2010 2011 2012 (est.) Mexican Exports of Vehicles to the US 878,742 1,277,184 1,440,481 1,447,425 Mexican Imports of Vehicles from the US 2,351 3,122 3,215 3,308 Figures in USD billions. Estimates reflect a composite of Transportation and Machinery Office Statistics, US Department of Commerce (OTM) th Mexico ranks as the 8 largest vehicle producer in the world, and the automotive sector accounts for 17.6 percent of Mexico’s manufacturing sector and 3 percent of its national GDP contribution. There are currently nine manufacturers in Mexico including General Motors, Chrysler, Ford, Nissan, Fiat, Renault, Honda, Toyota, and Volkswagen. This manufacturing base produces 42 brands in 20 manufacturing plants. Nissan and Daimler are considering Top US Prospects 12: 2 Export in Mexico 20 Automotive Parts and Supplies opening another manufacturing plant in Mexico to increase passenger car production. Nissan, GM, Volkswagen, and Honda plan to increase their production in Mexico. Fiat and Mazda are opening up plants for vehicle production in Mexico. Mexico produces more than 2.5 million cars on a yearly basis. 83 percent of its production is devoted to exports and the remaining 17 percent for the domestic market. The National Auto parts Industry Association (INA) reported a significant increase in the auto parts industry from 2011 to 2012 as per estimates. In 2011, the Mexican automotive industry experienced a 13.1% percent growth of local vehicle production due to higher demand, domestically as well as in the United States and other markets. The countries that Mexico exports to include: United States (64%); Canada (7%); Latin America (15%); Asia (2%), Europe (10%) and others (1%). Mexican vehicle sales in 2011 increased 10.4% compared with 2010. Market realities have led to new trends in car manufacturing, including smaller car sizes and increased fuel efficiency. The aftermarket is expected to increase, as Mexico imposed new duties and requirements on the importation of used vehicles since 2009. As a result, repairing and maintenance of used vehicles will require varied parts. In addition, other opportunities exist for U.S. exporters of spare parts, equipment and new technologies oriented to reduce costs and time. Parts equipment and first and second-tier components from the United States might experience an increase in exports as auto production increases in Mexico. The economic outlook for 2012 is conservative. Mr. Oscar Albin Santos, President of the National Auto Parts Industry expressed that the auto parts industry might report a production increase of one percent, an import increase of six percent and auto part export decrease of 4% by the end of 2012. Furthermore, Eduardo Solis, Chairman of the Mexican Auto Association, acknowledged that the industry’s situation remains linked to the economy and financial environment and forecasts a challenging 2012. To increase the demand in new car sales, the industry and the government will have to work on other strategies to target niches in the domestic market. The industry is currently working with the government to reduce taxes for purchasing a car, trade-in car replacement programs, among others. Despite the slow growth in demand and production, some automotive companies announced large investments in Mexico last year. This is due to Mexico’s advantage in low labor costs and recent technological development in the auto industry through design centers. In addition, companies are looking for lower manufacturing and export costs. Back to top Top US ospects 3 Export Pr in Mexico 2012: Automotive Parts and Supplies Best Prospects/Services The greatest opportunities include: spare and replacement parts for gasoline and diesel engines, electrical parts, collision repair parts, gear boxes, drive axles, catalytic converters, and steering wheels. In the first and second-tier supply chain sector, opportunities include: OEM parts and components, precision assembly devices, machined parts, hybrid vehicle components, suspension systems, and pre-assembly components such as small and progressive stampings. Other products in demand include electronic components, specialized tooling, systems that eliminate waste and green technologies such as new combustion systems to reduce gas emission and oil consumption. Back to top Opportunities Despite the economic recovery, lack of financing, high interest rates and competition, the market has become more price-sensitive. In Mexico, 50 percent of new cars are purchased on credit. Because of the credit shortage, new car sales have decreased and many consumers choose to maintain their vehicles for a longer period of time. As a result, President Calderon eliminated the ownership tax imposed to consumers effective Dec 31, 2011, with the exception of luxury vehicles. It is now the option of the Mexican state where the car is purchased to decide whether to charge this tax. Many Mexican states have decided not to charge this tax. This measure should stimulate the domestic market and the purchasing of new vehicles. In addition, OEMs located in Mexico will continue implementing strategic actions such as expanding their manufacturing base and upgrading their brand vehicles with new technologies to make them more efficient and affordable to consumers. The large number of used vehicles being driven in Mexico provides opportunities for exports of repair equipment and replacement parts. Effective January 2009, Mexico imposed a 10 percent duty on imports of used vehicles, which was decreased to 3 percent only for the border zone in March 2009. In 2012 used cars 8-10 years old can be imported and in 2013 used cars 6-8 years old can be imported. U.S. companies still face some barriers when exporting used cars to Mexico. The most significant requirements include having a Certificate of Origin, and the 10 or three percent tariff based on a minimum estimated price, or “reference price” for the given year, make, and model of the car. Importers of used vehicles must post a guarantee representing any difference in duties and taxes if the declared customs value is less than the established reference price. Effective November 2011, the Mexican government set up a mandatory emission control standard for the import of used vehicles. To avoid red tape, U.S. exporters can attach emission control state certificates from Arizona, California, Texas and New Mexico as those states show very strict standards which are compliant with Mexican standard 041. Top US t o 4 Expor Prospects in Mexic 2012: Automotive Parts and Supplies Therefore, U.S. exporters are advised to work closely with their importers and customs brokers to ensure that all specific requirements are met. Participation in Mexican automotive trade shows provides excellent opportunities to introduce new products and services in Mexico, after appointing regional distributors. Upcoming Events: • PAACE Automeckanicka 2012, July 18-20, 2012, Mexico City: Resources • National Auto Parts Industry Association: • Mexican Association of Automobile Distributors: • Mexican Association of Automotive Industries: • Business Monitor International: • Global Trade Atlas: • Office of Transportation and Machinery: Back to top For More Information Please contact Monica Martinez, Commercial Specialist for the automotive parts and supplies sector at the U.S. Commercial Service in Mexico at or (011-52-55) 5140-2628. You can also visit our website at The U.S. Commercial Service — Your Global Business Partner With its network of offices across the United States and in more than 70 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice. The Commercial Service reference to or inclusion of material by a non-U.S. Government entity in this document is for informational purposes only and does not constitute an endorsement by the Commercial Service of the entity, its materials, or its products or services International copyright, U.S. Department of Commerce, 2012. All rights reserved outside of the United States.
Posted: 30 June 2012

See more from Automobile in Mexico

Expert Views    
Automotive opportunities in Mexico   By UK Trade & Investment
Automotive opportunities   By UK Trade & Investment
Automotive Repair and Maintenance Equipment   By U.S. Commercial Service Mexico
Compilation of Foreign Motor Vehicle Import Requirements   By U.S. Commercial Service
Automotive Parts and Supplies   By U.S. Commercial Service Mexico