Auto Production Faces Industry Challenges Head-On
The Mexican automotive industry increased exports by 31.8 percent in Feb. 2022 and maintained its position as the seventh largest automotive manufacturer worldwide in 2021, despite industry challenges. To face some of these, Puebla is initiating efforts to bring semiconductor manufacturing locally.
Meanwhile, sustainability trends continue in the industry as automakers reduce water consumption, Volkswagen shifts to renewable energy consumption, General Motors halts production to shift towards EV manufacturing and Maersk partners with Einride for the production of electric trucks. Finally, President López Obrador’s “chocolate car” decree faces registration challenges and the members of the USMCA’s auto parts dispute panel have been assigned.
The week in automotive:
Mexico Maintains Its Position in the Auto Manufacturing Top 10
According to the International Organization of Motor Vehicle Manufacturers (OICA), Mexico was the seventh largest vehicle producer in 2021 despite the semiconductor shortage repeatedly halting production at multiple plants. Light commercial vehicle production in the country increased by 10 percent and by 7 percent in North America. However, China still leads in the sector.
Automakers Reduce Their Plants’ Water Consumption
Audi, General Motors and Nissan’s Mexican plants were among the automotive manufacturers worldwide to share their strategies to reduce water consumption in plant operations in observance of World Water Day 2022. In Audi’s Puebla plant, for example, water used to manufacture the Q5 vehicle was reduced by 50 percent through the implementation of the EcoDryScrubber.
Mexico’s Automotive Exports Increase by 31.8 Percent
Last month, Mexico’s foreign trade increased by almost a third with automotive exports representing US$14.25 billion. During January and February, automotive exports increased by 6.2 percent year-over-year, totaling US$22.5 billion.
Chocolate Cars Face Registration Hardships
President Andrés Manuel López Obrador’s controversial “chocolate car” decree is moving forward despite warnings of its potential impact on vehicle sales in the country. However, drivers looking to legalize illegally imported vehicles are facing barriers after the official registration website was not available in time and in-person registration centers have been reported as out-of-reach for many.
Puebla to Bring Auto-Part Manufacturing to Ciudad Modelo
To manage the ongoing semiconductor shortage, Puebla is looking to bring semiconductor manufacturing to the state. However, final plans are awaiting the result of the Federal Electricity Constitutional Reform.
Volkswagen Braves Production Halts Amid Sustainability Shift
Volkswagen’s Mexican plant has made significant strides in the adoption of renewable energy and the optimization of production processes in its path towards sustainability and carbon emissions reduction. However, the company is also having to manage production hits as a result of the semiconductor shortage deeply affecting its supply chain as Volkswagen has been one of the most affected brands by the crisis.
USMCA’s Dispute Panelists Selected
The panel members who will decide the outcome of the ongoing dispute between the US, Mexico and Canada have been selected. The composition of the panel presents a significant step in the conflict’s resolution regarding USMCA auto part’s origins interpretation for tariff benefits.
Maersk, Einride to Partner on Largest Ever Truck Electrification
The Swedish tech company Einride will provide its technology platform to Maersk for the production of 300 electric trucks to be distributed across select US cities between 2023 and 2025. The partnership follows Maersk’s investment in Einride’s Series B and will play a significant role in Maersk’s commitment to reach net-zero carbon emissions by 2040. Maersk also announced its order for 110 Volvo VNR Electric Trucks.
General Motors Will Produce Electric Vehicles in Mexico
Coahuila will become the first Mexican region to mass-produce EV’s through its General Motors plant in Ramos Arizpe, which has halted production from March 26 to May 14 to install machinery and equipment to manufacture these new vehicles. Workers will receive a loyalty bonus and training once production resumes in the plant, according to Coahuila’s government.