US Automotive Strike Impacts Mexican Auto Parts Exports

In the aftermath of a seven-week strike that affected nine plants in the US automotive industry, the National Auto Parts Industry (INA) reported a setback of US$785 million in auto parts exports from Mexico to the United States. Despite this disruption, the impact accounts for just over 1% of the total value of exports to the United States in 2022.

The strike, which involved three major US automotive companies and impacted 27% of their plants, may soon see a resolution as automakers and workers represented by the United Auto Workers union (UAW) have reached a preliminary agreement. 

While the strike’s impact on Mexico's automotive exports seems limited, the actual figures will only be available in February when precise export data is released, warns Armando Cortés, Director, INA. However, he is optimistic that the strike would soon reach a resolution: "The process was submitted to a union vote, and we are optimistic that these agreements will be ratified without any issues."

Despite the recent challenges, Cortés maintained the industry's production forecast for the end of 2023 at US$117.53 billion, representing a 12.1% increase compared to the previous year. This figure surpasses pre-pandemic levels, as the industry reported US$95.43 billion in production in 2019.

Cortés emphasizes the importance of the US market for Mexican auto part exports, with 87.4% of the industry's export value heading to the United States. Canada follows with 3.3%, Brazil with 1.9%, and China with 1.2%.

Mexico  has established itself as a leading supplier of auto parts to US automakers. INA’s records indicate that from 2007 to the present, no other country has surpassed Mexico in supplying the US automotive sector.

In the first eight months of 2023 alone, Mexico exported about US$61.087 billion worth of auto parts to the United States.

Mexico supplies 42.93% of auto  parts required by US automakers, while Canada contributes only 10.74%.

"One of the constants we have observed over the years is that the percentage of participation of auto parts in the US market consistently increases. Undoubtedly, given the dynamism of the North American economy in the automotive sector, this is good news for Mexico,” says Cortés.