Mexican Auto Leaders Discuss Nearshoring, USMCA, EV Shift

Mexico’s automotive industry, which accounts for more than 4% of the country’s GDP and over 20% of manufacturing GDP, is at a turning point. The country remains the world’s seventh-largest vehicle producer, the top automotive exporter in Latin America, and second in the Americas. However, mixed production performance, declining foreign direct investment (FDI) inflows, and pressure from the upcoming USMCA review are shaping a complex landscape.

These issues were central to a recent roundtable organized by fintech firm Mundi, which brought together representatives from the Metropolitan Automotive Cluster (CLAUT), the National Auto Parts Industry Association (INA), the Mexican Chamber of Industry (CANACINTRA), and the American Chamber of Commerce of Mexico (AmCham). Speakers emphasized that nearshoring, financing, talent development, and sustainability will determine whether Mexico consolidates its position as a global manufacturing hub.

So far in 2025, light vehicle production in Mexico fell 0.8% year-on-year, while heavy vehicle output dropped 25.8%. Light vehicle exports grew 1.4%, surpassing 303,000 units, with nine out of every ten exported to the United States. While this concentration has supported growth, it also exposes the sector to risks such as the recent US decision to impose 25% tariffs.

FDI flows into the industry fell more than 30% year-on-year in Q2, totaling US$2.22 billion. Still, 11 electromobility projects worth over US$473 million moved forward, primarily in Nuevo Leon, San Luis Potosi, and Guanajuato, strengthening these states as strategic centers.

“To maximize the nearshoring opportunity, we must strengthen local supply chains and integrate more companies into international trade through public-private collaboration. But without capital, sustainability is difficult. Strategic financing is key for companies to meet labor and technological standards and compete effectively,” said Paulina Aguilar, co-founder, Mundi.

She also noted that electromobility is already reshaping the industry. “Eleven electromobility projects are underway in Mexico, showing the transformation in progress. The challenge will be ensuring adequate financing so companies can adopt international standards and continue operating.”

Elisa Crespo, executive president, CLAUT, highlighted operational challenges. “We face disruptive supply chains, stricter quality management, and increasingly complex cost control. Strengthening the workforce through training and bringing financing instruments closer to supply chains is essential. Only then can we mitigate tariff risks and transition the industry toward a more competitive model.”

Crespo also underscored the sector’s resilience, noting that over half of companies implemented technical stoppages in 2024, negotiated with unions to preserve jobs, and adapted to market uncertainty. Looking ahead, she said, “it will be in 2027 when the automotive industry finds the necessary relief to maintain its global ranking.”

Mexico remains the world’s fourth-largest auto parts producer, surpassing Germany in 2021. INA Director General Gabriel Padilla said, “43% of the parts and components the US needs to manufacture a vehicle come from Mexico. That relationship is indestructible. The USMCA was key to consolidating shared manufacturing in North America and attracting investment post-pandemic.”

Daniel Romero, president, CANACINTRA Querétaro’s Automotive Committee, identified five main challenges from the USMCA: electromobility, stricter rules of origin, competition with Asia and Europe, access to clean energy, and infrastructure. “In the short term, costs may rise due to tariffs, but accelerated relocation will consolidate Mexico as a North American hub in the medium term, provided we strengthen supply chains and the electricity grid. Energy, digitalization, and infrastructure must be priorities,” he said.

From AmCham, Public Affairs Director Guillermo Bernal described the treaty as essential. “Eighty-five percent of our exports cross tariff-free, which remains attractive for Mexico. The USMCA is more alive than ever and crucial for regional competitiveness. The private sector must speak with one voice to define how regional content will be calculated and adapt to uncertainty.”

Industry leaders agreed that nearshoring and supply chain relocation are real opportunities but not automatic. Transforming Mexico into a global leader in automotive innovation requires investment in R&D, strategic financing, workforce training, and public policies supporting the transition to electric and sustainable mobility.

As Aguilar summarized, “With strategic financing, Mexican companies will have the economic capacity to compete and grow in this new stage.”