"The Booming Mexican Automotive Industry: Benefits for the U.S."

The Mexican Automotive industry has experienced a remarkable boom, consolidating itself as one of the most important economic pillars.

Table of contents

• Introduction

• Nearshoring

• Where are the main automotive manufacturers in Mexico located?

• Competitive advantage for the United States

• Conclusion 

Introduction

The first automotive industry in Mexico was established in 1921, which means that Mexico has a tradition of almost a century in this important sector. The products manufactured here have positioned the country as a platform for the development and manufacturing of vehicles, auto parts and components with the highest and strictest international quality standards.

In the last decade, automotive growth has not only benefited the local economy, but has also had a significant impact on the global market, especially in the United States. The combination of skilled labor, competitive production costs and “Nearshoring” has allowed Mexico to become a vehicle manufacturing hub, attracting automotive giants from around the world.

Nearshoring

It is important to revisit the term “Nearshoring” which has gained momentum in recent years, and whose meaning is to move manufacturing to a nearby country or transfer manufacturing processes to a more immediate geographic location, where the company can benefit from the proximity, schedule, culture, language, economy, politics or history.

Auto production in Mexican plants rose 8.64% year-on-year in the first two months of 2024 to 625,804 units, maintaining the upward trend of 2023, the National Institute of Statistics and Geography (Inegi) reported.

Industry Highlights

Exports of light vehicles increased by 14.59% to 536,975, while sales in the domestic market rose by 14.79% to 225,357, according to the autonomous institute's report.

Inegi specified that 75.8% of the light vehicles produced were light trucks and the rest were automobiles.

Where are the main automotive manufacturers in Mexico located?

- Audi: Puebla.

- BMW: San Luis Potosi.

- Chevrolet: Silao, Guanajuato, Ramos Arizpe, Coahuila.

- Ford: Cuautitlan Izcalli, Mexico, Hermosillo, Sonora.

- GMC: Silao, Guanajuato, San Luis Potosí.

- Honda: Celaya, Guanajuato.

- Infiniti: Aguascalientes, Aguascalientes.

- JAC: Ciudad Sahagún, Hidalgo.

- Jeep: Toluca, Mexico City.

- KIA: Pesqueria, Nuevo Leon.

- Mazda: Salamanca, Guanajuato.

- Mercedes-Benz: Aguascalientes, Aguascalientes.

- Nissan: Cuernavaca, Morelos. Aguascalientes, Aguascalientes.

- RAM: Saltillo, Coahuila.

- Toyota: Tijuana, Baja California Guanajuato.

- Volkswagen: Cuautlancingo, Puebla, Silao, Guanajuato.

Competitive advantage for the United States

For U.S. customers, this boom in Mexican manufacturing presents several tangible benefits. First, the geographic proximity between the two countries allows for a significant reduction in transportation costs and times. This translates into more affordable vehicles and greater availability of models in the U.S. market. In addition, shorter delivery times mean that consumers can enjoy the latest innovations and models more quickly. The quality of vehicles manufactured in Mexico has also improved considerably, thanks to the implementation of advanced technologies and strict quality controls, ensuring that customers receive reliable and durable products.

Another key aspect is the positive impact on the U.S. economy. The close collaboration between automotive companies in both countries has generated thousands of jobs in the automotive industry and related sectors, such as transportation and logistics. In addition, the healthy competition that arises from this collaboration can drive innovation and continuous improvement in the automotive industry, ultimately benefiting consumers with safer, more efficient and technologically advanced vehicles. 

Conclusion 

The rise of Mexican manufacturing companies in the automotive industry not only strengthens Mexico's economy, but also offers multiple advantages to customers in the United States, creating a landscape of opportunities and mutual benefits.

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