Image credits: Andy Li on Unsplash
News Article

Auto Sector Lost Ground in Mexico’s Exports

By Antonio Gozain | Thu, 09/30/2021 - 14:47

Mexico will close 2021 with exports for US$460 billion, an 11 percent increase compared with the US$417.6 billion exported in 2020 when the COVID-19 pandemic first hit, projected the Mexican Business Council for Foreign Trade (COMCE). While the automotive sector participation in the total exports increased from 27.8 percent to 28.8 in the first 8 months of 2021, it is still below pre-pandemic levels when it made up 32.2 percent of the total Mexican exports, according to INEGI.

"Semiconductors shortages may affect that by the end of the year we do not exceed the levels of 2019. I hope that does not happen, because companies are taking action," said in press conference Fernando Ruiz Huarte, Director General of COMCE.

Between January and August 2021, the Mexican automotive industry exported US$91.39 billion, a 7.5 percent decrease when compared to the same period of 2019. While the auto sector has not been able to recover its pre-pandemic figures, the rest of the exports returned to 2019’s levels. This is explained by a rebound in the Mexican economy from the pandemic, supported by the recovery of Asia, the EU and the rest of Latin America, said Ruiz.

"It is not a very large increase, but we will recover the export levels that we had until before the pandemic," said Ruiz.

When COVID-19 first hit in Mexico, sanitary authorities suspended productive activities to prioritize the public health. Several manufacturing Tier 1s, 2s, 3s and OEMs had to shut down operations for at least one month. The situation for the industry changed shortly after, when the Federal Government relabeled activities in which pauses could have “irreversible effects for its continuity” as essential, which included the automotive, aerospace, mining and construction industries.

However, the recovery of the automotive industry was halted by semiconductor chips shortages. In Mexico, GM, Volkswagen and Nissan had to do technical labor stoppages, slowing down production and decreasing sales. In addition to shortages, constant blockades of railroads have also affected Mexican automotive exports.

Private Sector, UDG to Cover Talent Deficit

Material shortages are not the only ones affecting the industry. In the next five years, Jalisco will require 4,000 to 5,000 specialized engineers for its auto sector, according to the Mexican Chamber of Electronics, Telecommunications and Information Technologies (CANIETI), while University of Guadalajara (UDG), the biggest engineering school in the state graduates 500 engineers per year.

Continental, NXP México and the Center of Science and Engineering (CUCEI) of UDG announced a collaboration to offer specialized certifications to train talent through a triple helix model. “It is a very big challenge. If we do not respond to those needs, private initiative will look for other places (to invest),” said to El Economista Marco Pérez Cisneros, Director of Electronics and Computing of CUCEI.

The data used in this article was sourced from:  
MBN, COMCE, INEGI, El Economista
Photo by:   Andy Li on Unsplash
Antonio Gozain Antonio Gozain Journalist and Industry Analyst