Mexico Unseats Germany in Auto Parts Production
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Mexico Unseats Germany in Auto Parts Production

Photo by:   Pixabay, ElAhuehuete
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Sofía Garduño By Sofía Garduño | Journalist & Industry Analyst - Thu, 04/07/2022 - 13:45

Mexico has unseated Germany as the fourth auto parts producer in the world. While in 2021 Germany’s auto parts production amounted to US$87.22 billion, Mexico closed the year with production valued at US$94.78 billion.


One of the reasons is that Germany has not been able to reach the vehicle production numbers it had prior to the pandemic. In 2021, Germany produced 3.31 million light vehicles, while in 2019 it produced 4.66 million units.


By the end of 2022, INA expects that the automotive industry will see a revenue of US$100.17 billion in auto part production. This forecast represents an increase of 6.3 percent compared to last year’s expected US$94.78 billion.


Mexico’s northern region represents 52.1 percent of Mexico’s auto parts production, followed by El Bajio with 31.1 percent of the production. Coahuila represents 17.2 percent of the total auto parts production in Mexico, followed by Chihuahua with 11.9 percent and Nuevo Leon with 11.4 percent. Nuevo Leon is experiencing continuous growth and might become the second state with the higher auto parts production during the coming months, said Alberto Bustamante, Director, National Auto parts Industry, INA.


The automotive industries of Mexico, the US and Canada have experienced growth thanks to USMCA regulations, imports substitutions and new investments, among other factors. The US is the largest auto part producer in the region, with a total production valued at US$247 billion. Since 2010, Mexico has increased its participation in the US’s supply chain by 104 percent and become its main auto part supplier thanks to economic integration achieved through trade in the region.


“The US produces approximately 11 million vehicles and has a demand of 17 million units. This is the reason why Mexico is so important to the US automotive industry. Mexico is essential to the supply of both auto parts and vehicles,” Bustamante added.


Canada’s auto industry, however, is still recovering and has not reached the US$32 billion it made in auto part production before the pandemic. By the end of 2022, Canada’s auto industry’s production amounted to US$30.14 billion. According to INA, this could benefit Mexico because the auto parts that are not being produced in Canada must be compensated for in the region.


Auto part exports to the US during Jan. 2022 represented 88.2 percent of the total participation of Mexico in foreign markets. Original equipment is mainly exported to the US, Canada and Brazil, whereas Japan, China and Germany receive mainly replacements. On the other hand, from the total auto parts imports, 52.8 percent came from US and 14.5 percent from China. During the past two years, China has maintained its place as Mexico’s second largest supplier but the Asian country’s participation is decreasing amid the integration of the North America region.

Photo by:   Pixabay, ElAhuehuete

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