Mexico stands as a pivotal market for U.S. automotive components, encompassing passenger and light vehicles, trucks, and the essential parts and technologies driving the electric vehicle (EV) revolution. The automotive sector’s robust presence in Mexico is undeniable, contributing significantly to the national economy, accounting for 3.6 percent of the GDP and a substantial 18 percent of the manufacturing GDP, while employing over a million individuals across the country. For car parts traders looking to expand their reach, understanding the dynamics of the Mexican market is crucial.
Mexico’s prominence in the global automotive landscape is underscored by its position as the world’s seventh-largest passenger vehicle manufacturer, boasting an annual production of 3.5 million vehicles. A significant 88 percent of these vehicles are exported, with the United States being the primary destination, absorbing 76 percent of these exports. The country is home to a diverse array of established automakers, including industry giants like Audi, BMW, Ford, General Motors, Honda, Hyundai, and more recently, Tesla, which has announced a new production plant in Nuevo Leon dedicated to electric vehicle manufacturing. This strong manufacturing base naturally fuels a substantial demand for car parts traders.
Beyond passenger vehicles, Mexico is also a powerhouse in heavy-duty vehicle manufacturing, ranking fifth globally. The nation hosts 14 manufacturers and assemblers specializing in buses, trucks, and tractor-trucks, along with two engine manufacturers, collectively operating 11 plants and providing over 28,000 jobs. Notably, Mexico is the world’s leading exporter of tractor trucks, with an overwhelming 95.1 percent heading to the United States. For car parts traders specializing in heavy-duty vehicle components, Mexico offers a significant export market.
Alt: Map showing the concentration of automotive manufacturing plants and auto parts suppliers across different regions in Mexico, highlighting key states like Baja California, Sonora, Chihuahua, Coahuila, and Nuevo León.
The geographical distribution of automotive manufacturers in Mexico is largely concentrated in the northern states, including Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, and San Luis Potosí. Original Equipment Manufacturer (OEM) plants also extend into Guanajuato, Aguascalientes, Jalisco, Estado de Mexico, Hidalgo, Morelos, and Puebla. This geographical clustering is important for car parts traders, as supply chains for auto parts producers are strategically located near these plants, primarily in Coahuila, Chihuahua, Nuevo León, Guanajuato, and other strategically important states.
USMCA and its Impact on Car Parts Trade
The implementation of the United States-Mexico-Canada Agreement (USMCA) on July 1, 2020, brought significant shifts to the automotive sector’s rules of origin. Under USMCA, vehicles must have 75 percent North American content (70 percent for heavy trucks), and core auto parts must originate from the US, Canada, or Mexico to qualify for duty-free access. This requirement, fully phased in by 2023 for vehicles and 2027 for trucks, presents both challenges and opportunities for car parts traders. For U.S. exporters of car parts, USMCA incentivizes sourcing and trade within North America, potentially increasing demand for U.S.-made components in the Mexican market.
This evolving trade landscape under USMCA is likely to generate new business avenues for U.S. exporters. Mexican OEMs and suppliers are actively seeking to increase the North American content within their supply chains to meet the agreement’s requirements. The U.S. Commercial Service in Mexico has developed resources to guide businesses through the USMCA implications for the auto sector, offering valuable insights for car parts traders navigating this new regulatory environment.
Market Size and Trade Dynamics for Car Parts
The robust demand for vehicles in Mexico, coupled with its close proximity to the United States, fuels a strong market for both original equipment and aftermarket auto parts. Mexico stands as the largest export market for U.S. automotive parts and ranks as the fourth-largest global producer of these components, generating an impressive USD 107 billion in annual revenue. This substantial market size underscores the significant opportunities available for car parts traders.
Table 1: Mexico Passenger Vehicle Sales in Mexico (Thousands of Vehicles)
| 2019 | 2020 | 2021 | 2022 | 2023 (Est.) | |
|---|---|---|---|---|---|
| Total Local Production | 3,811 | 3,040 | 2,979 | 3,308 | 3,526 |
| Total Exports | 3,388 | 2,681 | 2,706 | 2,865 | 3,071 |
| Total Imports | 906.7 | 764.5 | 991.3 | 1,176 | 1,360 |
| Imports from the U.S. | 126.0 | 75.8 | 84.5 | 99.1 | 113.7 |
| Total Market Size* | 1,329 | 1,123.5 | 1,264.3 | 1,619 | 1,815 |
*Total market size = (total local production + imports) – exports
Source: Mexican Automotive Industry Association (AMIA) and ITA Office of Transportation and Machinery
Table 2: Mexican Auto Parts Market for OEM and Aftermarket (USD Billions)
| 2019 | 2020 | 2021 | 2022 | 2023 (Est.) | |
|---|---|---|---|---|---|
| Total Local Production | 97.8 | 78.4 | 94.7 | 107.6 | 116.0 |
| Total Exports | 81.0 | 64.8 | 78.5 | 89.2 | 90.3 |
| Total Imports | 60.8 | 44.2 | 53.4 | 60.7 | 68.0 |
| Imports from the U.S. | 33.0 | 21.8 | 28.1 | 33.0 | 37.9 |
| Total Market Size* | 77.6 | 57.8 | 69.6 | 79.1 | 86.6 |
*Total market size = (total local production + imports) – exports
Source: National Auto Parts Industry Association (INA) and ITA Office of Transportation and Machinery
The tables above illustrate the substantial market size and trade volume in both vehicles and auto parts in Mexico. For car parts traders, the import figures, particularly from the U.S., highlight the existing trade relationships and potential for further growth. The increasing total market size for both vehicles and auto parts from 2020 to estimated 2023 suggests a positive trajectory for market expansion.
Strategies for Car Parts Traders in Mexico
For U.S. auto parts and equipment suppliers aiming to penetrate the Mexican market, establishing local representation or regional distribution networks is highly recommended. Assembly plants often favor suppliers located nearby to streamline inventory management and facilitate just-in-time deliveries. Car parts traders who already supply OEMs in the United States and possess a supplier number may find it easier to expand their business into Mexico.
The most commonly exported auto parts from the U.S. are related to components for Tier 1 and Tier 2 suppliers. However, diverse opportunities exist for car parts traders across various product categories, including production motors, plastic metal hybrid components, steering castings, stamped parts, connectors, and more. As automotive technology advances, Mexico is actively seeking solutions in areas like big data, wireless technologies, electrification, and innovation, creating new niches for specialized car parts traders.
To succeed in the Mexican automotive market, car parts traders should prioritize factors such as quality, certifications, competitive pricing, and efficient delivery. Building robust sub-supplier chains, demonstrating strong project management capabilities, and exhibiting flexibility and adaptability are also crucial for serving automotive market customers effectively. Competition in the OEM parts sector primarily comes from domestic manufacturers and international players from China, Japan, South Korea, Germany, and Canada.
Key Sub-Sectors and Opportunities for Traders
Mexico’s automotive industry presents diverse sub-sectors offering distinct opportunities for car parts traders:
- Original Equipment (OE) Parts: Supplying parts directly to vehicle manufacturers remains a core opportunity, driven by Mexico’s large manufacturing base.
- Aftermarket Parts: The growing vehicle parc in Mexico creates a consistent demand for replacement and maintenance parts.
- Electric and Hybrid Vehicle Parts: With the rapid evolution of the EV market in Mexico, demand for EV-specific components is poised for significant growth.
The Mexican EV market, while currently smaller compared to traditional vehicles, is experiencing rapid growth and presents a forward-looking opportunity for car parts traders specializing in EV components. Automakers’ strategic shifts towards electrification and carbon footprint reduction are further accelerating this market evolution.
Resources for Car Parts Traders
For car parts traders seeking to further explore the Mexican market, the following resources provide valuable information and industry insights:
- Mexican Automotive Industry Association (AMIA)
- Mexican Aftermarket Industry Association (ARIDRA)
- Mexican Trucks and Buses Manufacturer’s Association (ANPACT)
- National Auto Parts Industry Association (INA)
- ITA Office of Transportation and Machinery
- National Institute of Statistics and Geography (INEGI)
By leveraging these resources and understanding the market dynamics, car parts traders can effectively navigate and capitalize on the opportunities within the dynamic Mexican automotive industry.
Contact Information
For further inquiries regarding the automotive sector in Mexico, please reach out to:
Monica Martinez
Commercial Specialist
U.S. Commercial Service —Mexico City
Tel: +52 55 5080-2000, ext. 5218
Monica.Martinez@trade.gov
