Mexico Becomes The US’s Leading Auto Parts Supplier

Mexico significantly has improved its position as the main supplier of auto parts to the US. The Latin American country captured 42.72% of the US market share of automotive parts and components during the first five months of 2023, according to the National Auto Parts Industry Association (INA). During the corresponding period in 2022, it held a share of 39.28%. 

In January-May 2023, Mexico increased its market share in US imports by 3.44 percentage points. Back in 2007, the Mexican industry accounted for 29.82% of the purchases made by the US automotive sector. 

From January to May 2023, Canada occupied the second spot in terms of supply of auto parts to the US, with a share of 10.83%. It is followed by China with 7.65%, Japan with 6.86%, South Korea with 6.18% and Germany with 5.95%, according to INA. During that period, Mexico's auto parts sector exported goods worth US$36.99 billion to the US, for a total of US$42.33 billion in exports worldwide. To date, 87% of parts and components exported head to the US market.

Armando Cortés, Director General, INA, highlights that Mexico has not only established itself as the primary supplier of parts and components to the US, but the country is also experiencing the highest growth in exports. “The auto parts industry is on track to achieve a record-breaking year in production and exports in 2023. In May alone, we recorded US$10.475 billion in manufacturing, marking the highest figure in the industry's history. Now Mexico sells four times more than Canada and seven times more than South Korea," says Cortés.

Mexico's position as an auto parts supplier is further cemented by changes in USMCA’s rules of origin that aim to increase regional content value.

In today's landscape, vehicles have evolved into computers on wheels, increasing demand for semiconductors and sensors. This development emphasizes Mexico's importance in the pursuit of discovering domestic sources for printed circuits — a procedure that encompasses the production of semiconductors.

The manufacturing of vehicles and components within the US grew by 9.3% by April. This growth has been propelled by the escalating demand for parts originating from Mexico.