Mexico Auto Jobs Drop 320,000 in 1H25 on Tariffs, Weak Demand

Mexico’s automotive and construction industries experienced significant declines in employment and production during the first half of 2025, reflecting both external and internal pressures on key sectors of the national economy.

According to the National Institute of Statistics and Geography (INEGI), employment in the automotive industry fell from 5.06 million workers in the first half of 2024 to 4.73 million in the same period of 2025—a drop of 328,921 jobs, or 6.5% year-on-year. This marks the first contraction in four years and the first since 2020, when the COVID-19 pandemic disrupted global supply chains.

“The automotive industry depends heavily on the US market, which absorbs around 80% of Mexican exports. The uncertainty created by tariffs implemented by President Donald Trump, combined with weaker global demand for vehicles, is forcing automakers to adjust production and workforce levels,” said Héctor Magaña, Coordinator, Center for Research in Economics and Business (CIEN), Tecnológico de Monterrey.

The employment decline varied across subsectors. Vehicle parts manufacturing—the largest employer—fell from 4.22 million to 3.94 million workers, a 6.7% decrease. Body and trailer production dropped from 156,100 to 139,700 employees, down 10.5%. Vehicle and truck manufacturing contracted by 4%, equivalent to 27,000 jobs. Magaña emphasized that the automotive ecosystem goes beyond assembly lines, involving suppliers, logistics, and service networks that sustain millions of families nationwide.

The job losses follow several strategic moves by automakers. Nissan confirmed the closure of its historic CIVAC plant in Cuernavaca, Morelos, as part of its global Re:Nissan plan, shifting operations to its Aguascalientes facility between April 2025 and March 2026. Stellantis temporarily halted operations at its Toluca plant in April due to US tariffs.

“The lack of clarity in the trade relationship with the United States is influencing corporate decisions. Without certainty, more companies may reconsider their strategy in Mexico,” Magaña added. The automotive sector accounts for roughly 4% of Mexico’s GDP, more than 20% of its manufacturing GDP, and generates over US$150 billion in annual exports.