Automotive sector in Mexico

As of 2012, Mexico is the 8th largest automotive producer in the world, just above Spain, according to the Organisation Internationale des Constructeurs d’Automobiles (OICA) and has the highest growth percentage in the top 10 group.

Market overview

2011 was a record breaking year for the Mexican automotive sector and forecasts predict ongoing success for the next few years. Three light vehicles Original Equipment Manufacturers (OEM’s) announced completely new plants in the country and four more announced expansion of their current investment. The country is also the world’s 6th heavy vehicle producer.

Skilled workforce, a stable economy, low country risks, a mature supply chain, a clear legal framework, large logistics infrastructure and a network of Free Trade Agreements (FTA’s) have all been factors behind this growth. In 2011 the automotive industry accounted for 4% of the nation’s GDP and 20% of manufacturing production. The sector is one of the top 4 drivers of the Mexican economy along with mining, oil & gas and remittals.

In addition, last year was a record breaking year in exports. Automotive exports reached 2.14 million vehicles in 2011; a 15% increase from the previous year, placing Mexico as the 5th largest vehicle exporter worldwide. Automotive exports represent 23% of the total country’s exports.

The auto parts sector is a key part of Mexican automotive growth. Around 1,100 companies manufacture automotive components in the market and represent almost US$68 billion worth of production. This is a clear sign of how the local supply chain is so attractive for FDI in this sector

Key opportunities

Engineered parts for diagnostic and assembly equipment:

  • Braking systems.

  • Electrical components.

  • Transmission and engine components.

  • Stamped steel parts steering assemblies.

  • Interior trims and light weight alternative metals.

Opportunities for Tier 1 & 2

  • OEM parts & components.

  • Hybrid vehicle components.

  • Materials.

  • Stampings.

  • Electronic components.

  • Equipment and specialised tooling.

High Technology

Key opportunities for the UK include high tech components and the mainstream application of the motor sport technology industry. This includes high-end manufacturing, design and automotive engineering.

British companies such as GKN Driveline, Goodridge and Invensys, with superior quality auto parts, are already taking advantage of the opportunities the country is offering.

Opportunities for suppliers are expected to continue growing and, according to current forecasts, a higher demand for hybrid and high tech applications is anticipated. The main reason behind these forecasts is increased demand for environment friendly and smaller sized vehicles. This is also combined with an increased social awareness to reduce the carbon footprint in the United States.

Market Prospects

With production rising there is excellent market potential for exporters in the aftermarket sector. Electrical systems, panels, windscreen wipers, transmission and engine assembly. bring further opportunity. Other key aftermarket products include:

  • Rims.

  • Stereo and CD/radio equipment.

  • Alarm and security systems.

  • Special shock absorbers.

  • Tail lights.

  • Floor mats.

  • Waxing material

  • Cleaners and additives.

  • Paint restoration kits.

  • Tool boxes.

  • Collision repair parts.

  • Catalytic converters.

  • Steering wheels.

  • Brakes and other general services.

  • Sound systems.

  • Tune-Up products.

  • A/C parts.

  • Engine, steering and suspension parts.

  • Electric and electronic components

Latest export opportunities in the Automotive sector

Latest export opportunities in Mexico

Getting into the market

For most SMEs the best route to market is through a distributor with a good customer base and market experience. Some medium sized SMEs also establish branches, subsidiaries or sales offices with locally engaged staff when they already have a customer base in the market or have identified sufficient market potential. A few midsized companies even establish a manufacturing operation in Mexico if the demand justifies the resources involved.

Larger companies are usually advised to begin full operation in the country as Mexico is a strategic gateway to both North and South America. Although it really depends on the business structure and particular situation of each company, automotive companies usually benefit from having an operation in the country and taking advantage of the favourable conditions Mexico offers in this sector

More about doing business in Mexico

Contacts

Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits through our chargeable Overseas Market Introduction Service (OMIS).

To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.

Contact your local international trade team

UKTI Events

UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.

Latest events in the Automotive sector

Major Events

TOP FLOTILLAS

September 26-28, 2012

www.topflotillas.com

ENGINE TESTING EXPO

October 23-25, 2012

www.testing-expo.com

AAPEX & SEMA AUTOSHOWS

October 30 – November 1, 2012

www.aapexshow.com

www.semashow.com

MEXICO’S AUTO INDUSTRY CONFERENCE

December 6, 2012

www.mexico-now.com

Useful links

More about OMIS and other UKTI services for exporters

Countries: Mexico
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