Mexico Auto Sector Loses 107,000 Jobs in Two Years

Mexico’s automotive manufacturing sector has recorded two consecutive years of workforce reductions, shedding a total of 107,000 jobs over the 24-month period ending in April, according to government data. Analysts attribute the decline to newly imposed United States tariffs, weaker domestic business confidence, and rising international trade tensions.

Data from the Monthly Survey of the Manufacturing Industry (EMIM), conducted by the National Institute of Statistics and Geography (INEGI) since 1964, shows that total employment across factories producing automobiles, trucks, bodies, trailers, and auto parts stood at 742,000 workers in April. This figure represents a decrease of 50,000 positions compared with the same month in 2025, and a cumulative loss of 107,000 jobs relative to April 2024.

A breakdown of the data shows that the contraction has been concentrated in specific sub-sectors:

• Auto parts manufacturing: accounted for the largest reduction, eliminating 91,000 positions over the last two years.
• Car and truck assembly: reduced its workforce by 10,000 jobs.
• Body and trailer production: contracted by 6,000 positions.

According to the National Bank of Foreign Trade (Bancomext), the automotive sector remains a backbone of the economy due to its high-value-added supply chains. Bancomext notes that the industry “promotes technology transfer, develops an advanced manufacturing ecosystem, and fosters supplier development across the various stages of the production process.” It also states that the sector provides a foundation for the expansion of advanced industries such as aerospace, with auto parts suppliers able to “evolve toward higher value-added industries” through appropriate technical certifications.

Market analysts at Banco Base directly attribute the multi-year downsizing to tariffs imposed by the United States on the automotive sector. These trade barriers coincided with a 5.1% year-over-year decline in Mexican automotive exports to the United States between January and April.

Despite the contraction, the automotive industry remains Mexico’s largest source of foreign currency. Between January and April, automotive exports generated US$59 billion. This is three times the volume of inbound remittances, which totaled US$20 billion over the same period, and more than four times the revenue generated by international tourism, which reached US$13 billion.

However, Banco Base analysts emphasize that structural domestic challenges continue to weigh on sector growth, including a “lack of investment in Mexico due to the deterioration of the rule of law, low business confidence, and uncertainty regarding the future of the commercial relationship with the United States.”

The industry-wide contraction has also been accompanied by heightened labor tensions under international trade frameworks. In August 2025, the French-owned Faurecia Sistemas Automotrices plant, located within the Puerto Interior industrial park in Silao, Guanajuato, dismissed multiple employees after management identified efforts to collect signatures supporting affiliation with the independent union SINTTIA.

The terminated workers filed a legal challenge seeking reinstatement before labor courts in Guanajuato. Following a lack of resolution, representatives from SINTTIA activated the Rapid Response Labor Mechanism established under the USMCA.

In response, the United States government requested that Mexico investigate conditions at the Silao plant, aiming to determine whether the company is violating workers’ rights to freedom of association.

The government of Guanajuato issued a statement noting that local authorities remain “closely attentive to the development of this federal procedure.” It added that it will continue monitoring the investigation while “upholding full respect for labor rights and institutional legality.”