Plastic Shortages Affect Mexican Automotive Industry

Mexico’s automotive industry saw a 13 percent decrease in its vehicle exports in March 2021, according to INEGI. Mexico exported a total of 256,119 vehicles last month, which were 39,080 fewer units than in March 2020. Part of this decrease is attributed to the decrease in exports to the US, the main destination for Mexican automotive exports, which fell by 14 percent, reports El Informador. This problem is also exacerbated by the ongoing global shortage of semiconductors and plastic resins. 

What Is Going On With Semiconductors?

A global shortage of semiconductors is affecting the automotive and auto parts industries due to the high demand for computer equipment and telephones generated by the pandemic’s work-from-home dynamic, reported MBN. The ongoing shortage still affects the automotive industry.

What About Plastic Resins?

Plastic resins are facing a shortage problem due to many reasons, from plants being shut down to a global shortage of shipping containers derived from the COVID-19 pandemic, reports Bloomberg. The root of the problem comes from the mass blackouts that occurred in Texas, derived from the low temperatures the state suffered earlier in the year. According to The Wall Street Journal, the blackouts caused many plant shutdowns throughout the region, disrupting supply chains and distribution channels and producing a shortage of raw materials.

“It has gotten to a point where warehouses are empty and businesses are unfortunately forced to stop production because there is not enough raw materials. And that is particularly unfortunate because demand is high — not just for food but also the automobile and furniture sectors,” said Martin Engelmann, General Manager at the IK Industrievereinigung Kunststoffverpackungen e.V., to The Wall Street Journal. This has had a huge impact on the Mexican industry.

Óscar Albin, President of INA, explained that when gas pipelines in Texas were closed, plastic resin manufacturers in the Gulf of Mexico had to be shut down, reports El Informador. Moreover, due to the supply shortage, the increase in demand for plastic goods caused plastic prices to skyrocket, causing many cost increases and delays for automakers, home builders and many other businesses, reports The Wall Street Journal. Albin explains that the impact on automotive manufacturers is huge, due to the use of plastic components for car interiors, doors, dashboards, seat linings and engine housings, reports El Informador. According to Milenio, Albin has mentioned that the plastic resin problem will soon be resolved but during the next few weeks, there will be some shortages until inventories recover.