Mexico City Serves as a Vital Automotive Export Hub

Mexico City became the country’s leading state in automotive exports amid Mexico’s manufacturing and nearshoring boom.

Offering competitive production, labor costs and operational efficiencies, Mexico has become an attractive destination for automotive manufacturing. Among its many states, Mexico City has become a vital hub within this sector.

The country's vehicle exports grew 7.85% between January and April 2023 in comparison to the same months of 2022, according to a production, export and domestic sales report by the National Institute of Statistics and Geography (INEGI).

Mexico City by itself accounted for 40.4% of the total vehicle exports last year, amounting to US$54.95 billion, according to the Ministry of Economy. However, these exports are attributable to the automakers that have headquarters and fiscal addresses in Mexico City. “The explanation for the exports being accounted for in Mexico City is that the corporate entities are registered and report their taxes based on Mexico City,” Armando Soto, President, Kaso y Asociados, tells Reforma. 

The second entity that exported more cars is Puebla, accounting for 11 %, followed by Guanajuato with 6.9%. Puebla has factories and corporate offices of numerous automakers, including Volkswagen and Audi.

The US has been the main destination for these exports, followed by Germany, which makes sense considering the presence of German brands in Mexico. Mexico’s commercial and network agreements, such as the USMCA, continue boosting exports to its northern neighbor. With companies such as General Motors and Nissan, Mexico's auto exports are soaring. Among the 18 brands and models manufactured in Mexico, both of those OEMs have consistently led sales since 2022 and are now dominating the export market.

In past years, the automotive sector experienced a decline in production due to supply line shortages, which had a direct impact on sales and market share. However, exports are recovering and emerging as a formidable component that holds great promise for the industry's future, becoming a key driver of growth and development, as previously reported in MBN. By welcoming new opportunities, Mexico seems on track to become one of the world’s largest auto part manufacturers thanks to the increase in regional content and the nearshoring boom that the country is experiencing.

The constant demand for Mexican-made vehicles has positioned the country as a significant player in the global landscape. Within just the first quarter of 2023, the automotive industry in Mexico has regained momentum.