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Automotive Industry in
Mexico and North America
Fausto Cuevas Mesa
General Director
Asociación Mexicana de la
Industria Automotriz
2
1951-2019
Economic relevance
3
Automotive Sector
Economic Relevance:
4
Top generator of foreign
currency. Foreign trade
automotive surplus of 83
billion dollars by 2018
Generates 3.7% of total GDP
and 20.7% of manufacturing
sector GDP
By 2018 Mexico has become
the 6th largest manufacturer
of vehicles worldwide and 1st
in Latin America
Mexico is the 4th largest light
vehicle worldwide exporter
and 1st supplier to United
States market
Mexico is the 5h largest
automotive parts exporter
and 1st supplier for United
States market
Automotive products
represent more than 1/3
of manufacturing
sector exports
Production and Exports
– Mexico represents 4.2% of worldwide total vehicle production.
– Close to 88% of Mexico´s vehicle production is exported.
5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.519
97
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18
Millio
nu
nit
s
Production Exports
Source: INEGI – RAIAVL and AMIA.
Δ-0.6%
Δ6.0%
Automotive Industry GDP
From 2008 to 2018, Mexican automotive industry has consolidated as
the most important in the Mexican economy, increasing 99% its share in
total GDP and 80% in manufacturing sector GDP.
6Source: INEGI – Sistema de Cuentas Nacionales.
1.9%1.7%
2.1% 2.2%2.5% 2.6%
2.8%
3.4%3.5%
3.7% 3.7%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Automotive industry shareTotal GDP
11.5%10.6%
13.0%14.0%
15.0%15.8%
17.0%
18.4%19.5%
20.2% 20.7%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Automotive industry shareManufacturing industry GDP
… the automotive industry impacts 95 economic activities of manufacturing industry and 70 of trade and services.
GDP Growth
From 2010 to 2018
Mexican automotive
industry annual
average rate of GDP
growth was 11.3%.
National GDP annual
average rate of growth
has been 3.0% and the
manufacturing sector
GDP growth was
3.3%.
7
Source: INEGI - PIB y Cuentas Nacionales.
3.0%3.3%
11.3%
Total GDP Manufacturing GDP Automotive Industry GDP
Average growth per year (2010 – 2018)
• The automotive industry is the main GDP generator for
the manufacturing sector
Source: INEGI – Sistema de Cuentas Nacionales. 8
Share manufacturing
industry GDP1993 2000 2010 2017 2018
Percentages 100.0% 100.0% 100.0% 100.0% 100.0%
Automotive industry 8.4% 12.0% 13.0% 20.2% 20.7%
Agroindustry 18.6% 16.7% 22.6% 20.7% 20.3%
Chemical industry 10.0% 8.5% 10.4% 8.2% 6.4%
Basic metal industry 4.7% 5.1% 7.8% 6.5% 6.4%
Beverages and
tobacco industries5.9% 4.6% 5.6% 5.6% 5.9%
Other industries 52.4% 53.0% 40.6% 38.8% 40.3%
Manufacturing sector in Mexico
18.6%
20.3%
5.9%
5.9%
10.0%
6.4%
4.7%
6.4%
8.4%
20.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
19
93
19
94
19
95
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96
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97
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99
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20
01
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02
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08
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11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Agroindustry Beverages and tobacco industries
Chemical industry Basic metal industry
Automotive industry
9Source: INEGI - PIB y Cuentas Nacionales.
Manufacturing sector in Mexico
The automotive industry is the main source of jobs for the manufacturing sector.
It generates more than 900,000 direct jobs, 23.3% of manufacturing employment.
Source: INEGI – Encuesta Mensual de la Industria Manufacturera. 10
Automotive industry23.3%
Agroindustry17.5%
Computer and communication
equipment8.0%
Basic metal industry
6.6%
Other industries
44.6%
Employment 2018Manufacturing Industry
142.18
59.30
0
20
40
60
80
100
120
140
160
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Bill
ion d
olla
rsExports Imports
Automotive Trade Balance*
11
82.88
0
10
20
30
40
50
60
70
80
90
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Bill
ion d
olla
rs
Automotive balance
Source: SAT, SE, BANXICO, INEGI. Balanza Comercial de Mercancías de México. SNIEG.
* Includes motor vehicles and auto parts.
Exports of automotive products by 2018 were 142.18 billion dollars, while imports were
59.30 billion dollars.
Trade Balance
12
-10,968 -318
70,766
-18,309
21,336
30,291
-13,704
2,195
82,880
-23,190
22,510
33,481
-30,000
-10,000
10,000
30,000
50,000
70,000
90,000
National balance Manufacturingbalance
Automotivebalance*
Oil productosbalance
Tourism income Remittancesincome
Mill
ion
do
llars
2017 2018
Source: SAT, SE, BANXICO, INEGI. Balanza Comercial de Mercancías de México. SNIEG.
* Includes motor vehicles and auto parts.
Light vehicles manufacturing plants*
13
Future plants
Guanajuato
Baja CaliforniaSonora
Chihuahua
Coahuila
Nuevo León
San Luis Potosí
Guanajuato
PueblaMorelos
Estado de México
Jalisco
Aguascalientes**
Source: AMIA
*Includes motor and transmission plants
**Infiniti – Mercedes Benz joint plant (COMPAS)
Railway System
Source: Secretaría de Comunicaciones y Transportes. 14
15Source: Secretaría de Comunicaciones y Transportes.
571,385
vehículos
167,029
291,992
48,538
445,576
vehículos
297,860
Vehicles trade by port in 2018Export Import
National ports system
23,212
54,71226,460
98,650
16
World vehicle production*
Source: OICA
*Includes light vehicles and heavy duty vehicles
Ranking
20181 2 3 4 5 6 7 8 9 10
Ranking
20171 2 3 5 4 7 6 9 8 10
Ranking
20161 2 3 5 4 7 6 10 8 11
0.0
5.0
10.0
15.0
20.0
25.0
30.0
CHN USA JPN IND GER MEX KOR BRA SPN FRA
Mill
ion v
ehic
les
2016 2017 2018
Light vehicle production
17Source: INEGI - RAIAVL and AMIA.
1.9 1.8 1.8
1.5 1.51.6
2.0 2.02.1
1.5
2.3
2.6
2.9 2.9
3.23.4 3.5
3.9 3.9
2.96 2.93
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
jan-s
ep 2
01
8
jan-s
ep 2
02
0
Mill
ion
ve
hic
les
Δ-0.8%
Domestic Market
18
Mexican domestic market
• In 2018 1,424,170 light vehicles were sold, 7.2% less than in 2017.
• In jan-sep 2019, 7.5% less vehicles were sold in comparison with jan-sep 18
1,0
25
,54
4
1,5
34
,82
7
1,4
26
,92
6
1,0
32
,92
5
95
5,3
95
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1993
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
2018
jan-
sep…
jan-
sep…
ve
hic
les
Source: INEGI - RAIAVL.
Δ-7.5%
Used vehicles imports
20
Source: AMIA with SAT – AGA data.
1,031,048
272,909
470,483
596,889
458,114
644,209
455,372
179,577 147,829 123,638 141,75291,512 103,063
0
200,000
400,000
600,000
800,000
1,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ene-ago18
ene-ago19
Used vehicles imports increased 14.7% in 2018.
In jan-aug 2019 they have grown 12.6% in comparison with jan-aug 2018.
Credit sales
21* Includes most automotive lenders
Source: AMIA with JATO Dynamics and AMDA data.
54.4%
57.7%
61.4% 62.1%
62.3%
59.9%
0
200,000
400,000
600,000
800,000
1,000,000
2014 2015 2016 2017 2018 2019
Veh
icle
s
jan – aug
New vehicle sales Sales of new vehicles through credit*
At least
59.9% of
the 2019’s new
vehicles
were sold
through
credit.
GDP per Capita and Sales per 1000 people
22
Source: World Bank, Conapo, INEGI and Banxico.
Source: US Census Bureau, Ward's, Desrosiers, VDA, ANFAC, ANFAVEA, ADEFA, ANAC, OICA, AMDA, INEGI and Conapo.
*2017 data
GDP per Capita
Light vehicles sales per 1,000 people
59,532
45,032 44,470
28,157
15,346 14,39810,722 9,821 8,910
19,60714,864
9,256
0
10,000
20,000
30,000
40,000
50,000
60,000
United
States
Canada Germany Spain Chile Argentina World Brazil Mexico Mexico
City
Nuevo
Leon
Jalisco
Do
lla
rs
52 55
43
27 2315 13 12 11
2822
14
0
10
20
30
40
50
60
United
States
Canada Germany Spain Chile Argentina World* Brazil Mexico Mexico
City
Nuevo
Leon
Jalisco
Un
its
…supply chain opportunity
23
Market value and investment
opportunity in the supply chain in Mexico
• 74% of total
demand for
processes is
imported,
therefore, there are
huge investment
opportunities for
foreign companies.
• The most
demanded
processes are
stamping, foundry,
forging ,
machining, plastic
injection and
casting.Source: PROMEXICO. The Auto Parts Industry, Business Intelligence Unit.
PROMEXICO’s calculations.Data in billions of dollars.
24
Automotive industry suppliers
The automotive industry is subject to constant change, so it requires that its
suppliers be at the forefront of both new technologies and existing
technologies to remain competitive.
Source: Global Automotive Supplier Study 2018 - Lazard, Roland Berger 25
Investigación y Desarrollo
en la industria automotriz
26
Automotive Industry
Universities and Research Centers Group
27
1. Human resources
3. Infrastructure
4. Collaborative projects
5. Government incentives
6. Legislative agenda
Automotive R&D centers
28
Mexican automotive
industry in North America
29
World vehicle production by region 2018
30
North
America
17.4
European
Union
21.3
Asia/Oceania
52.4
Source: AMIA with OICA data.
95.7 million vehicles
31
World vehicle production*
Ranking
20181 2 3 4 5 6 7 8 9 10
Ranking
20171 2 3 5 4 7 6 9 8 10
Ranking
20161 2 3 5 4 7 6 10 8 11
0.0
5.0
10.0
15.0
20.0
25.0
30.0
CHN USA JPN IND GER MEX KOR BRA SPN FRA
Mill
one
s de u
nidades
2016 2017 2018
70.3% of the world production
Source: OICA
*Includes light vehicles and heavy duty vehicles
North American Vehicle Production
• From 1993 to 2018 vehicle production of NAFTA region increased 22.6%.
• In 2017 close to 18% of the vehicle world production was from the NAFTA region.
32Source: AMIA with Ward’s Automotive and OICA data.
Canada15%(2.2
million)
United States78%(10.9
million)
Mexico7%(1.08
million)
1993
NAFTA: 14.2 million vehicles.
Canada12%(2.0
million)
United States65%
(11.3 million)
Mexico23%
(4.1 million)
2018
NAFTA: 17.4 million vehicles.
2017
US: 11.19
Can: 2.19
Mex: 4.09
Million vehicles
33
US Motor Vehicle Trade
North America49.1%
Japan20.5%
Germany9.8%
South Korea6.4%
United Kingdom
4.5%Other9.7%
2018 motor vehicle imports - US
Source: AMIA with USITC data.
*NAICS 3361 –Motor vehicles.
North America52.3%
China10.3%
Germany8.9%
Saudi Arabia3.0%
Australia2.8%
South Korea2.7%
Others19.9%
2018 motor vehicle exports - US
Almost half of the US motor vehicle imports are from Canada and Mexico.
More than half of the US motor vehicle exports goes to Canada and Mexico.
North
America
70.9%China
5.1%
UK
2.6%
Germany
2.3%
Japan
1.9%Other
17.2%
2018 motor vehicle parts exports - US
North
America
54.3%
China
13.0%
Japan
9.3%
South
Korea
5.1%
Germany
4.3%Other
14.0%
2018 motor vehicle parts imports - US
US Autoparts Trade
70.9% of US autoparts exports goes to Canada and Mexico.
US autoparts exports to China, UK, Germany and Japan represent 11.9% of the
total.
34Source: AMIA with USITC data.
*NAICS 3363 –Motor vehicles parts.
North American Vehicle Production Integration
35
The raw aluminum
to make a piston
shipped from
Michigan to Ontario
to be made into a
piston casting
In Ontario the part is
pre-machined and
then shipped for
additional machining
in Michigan
It crosses borders
again to enter into
Mexico, where the
part is finished
After machining, the piston
travels from Mexico to
Wisconsin for marrying to
the connecting rod and
outfitted with piston rings
before it travels to a
Michigan Engine Plant for
final assembly
The piston (inside
the engine) now
travels from
Michigan to Ontario
for assembly into a
vehicle
The vehicle crosses
the border again to
meet its owner in
the US
Source: CVMA, Transportation Borders Working Group
USMCA
Automotive Rule of Origin
36
USMCA rules of origin for automotive goods
• It is very important to allow continuity of trade flows in North
America.
• USMCA’s new rules of origin set a challenge for Mexican vehicle
manufacturers. Transition periods shall be negotiated case by
case to adapt to the new provisions.
USMCA rules of origin for automotive goods
• There are 4 requirements for a vehicle to be considered originating:
1) Regional value content of the vehicle (75%)
2) Regional value content of the core parts (75%)
3) 70% of the corporate purchases of steel and 70% of the corporate
purchases of aluminum from North America
4) Labor value content, 40% for passenger vehicles and 45% for light
commercial vehicles (pick ups)
• Transition of 3 years with the possibility of 2 more years (3+2).
¡ T H A N K Y O U !
@AmiaMexico
Asociación Mexicana de la
Industria Automotriz ac
Fausto Cuevas Mesa
General Director
Asociación Mexicana de la Industria Automotriz
(55) 5272-1144
