Mexicos Automotive Sector

1
Mexicos Automotive Sector

• May 2007

Prepared by Office of Representation of Mexicos
Secretary of Economy in Japan Mexico-Japan
Economic Partnership Agreement Embassy of
Mexico Email comunicatokio_at_economia.gob.mx,
Tel. [phone]
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Mexicos Automotive Sector

• Mexicos automotive industry is one of the
  countrys most important sectors in terms of FDI,
  exports, and employment
• Mexico is one of the top ten global manufacturers
  of vehicles
• In 2006, Mexico produced 1,978,771 vehicles
• During the first four months of 2007, Mexico
  produced 597,382 automobiles

Mexicos annual vehicle production
Number of Vehicles
Source Mexican Association of Automotive
Industry (AMIA)
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Mexico Among the Worlds Top Ten Countries in
the Production and Exports of Automobiles
FTA EFTA
Automotive products and finished vehicles
produced in Mexico are exported to more than 30
countries, including Japan, under preferential
market access through Mexicos FTA network
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Mexicos Automobile Exports

• In 2006, Mexico exported 1,536,768 vehicles, a
  29.5 increase from the previous year
• From January to April 2007, Mexico exported
  449,338 vehicles

Number of Vehicles
Source Mexican Association of Automotive
Industry (AMIA)
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Mexicos Autopart Industry

• The autopart industry in Mexico comprises
  approximately 350 companies in the Tier 1
  category. About two thirds of those companies are
  foreign owned
• Mexico needs to expand its manufacturing base in
  Tier 2 and 3 suppliers. The Mexico-Japan EPA
  represents an opportunity to Japanese autopart
  companies in Mexicos growing automotive
  manufacturing sector

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Structure of Mexicos Auto Parts Industry
14 companies
Assemblers
Air Conditioning, Engine Components, Steering,
Suspension, Logistics, Die Casting Molding,
Electronic Components
7.0 of Total Manufacturing GDP 8.1 of Total
Manufacturing Exports Total Production 1.677
Billion Dollars (Estimated, 2004)
345 companies (mostly foreign)
Approx. 1,000 companies (About 30 are domestic)
Casting Components, Press, Plastic, Aluminum,
Logistics, Bearing, Machining, Die Casting
Molding, Machine Tools
Parts Suppliers
Source INA (Mexicos National Industry of
Autoparts)
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Strengthening of Mexicos Support Industries

• Mexicos Ministry of Economy Fosters the
  Formation of Supporting Industries in the Auto
  Parts Sector

Strategic Alliances between Japanese SMEs and
Mexican companies to become suppliers
Strengthening Mexican Small and Medium
Enterprises
Formation of Mexico-Japan Supply Chain Win-Win
Business Opportunities
Strengthening Competitiveness of Japanese
Companies in Mexico
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Mexicos Exports of Autoparts
Motor Vehicle parts imported by the US in 2006

• According to the US Department of Commerce, in
  2006, Mexico was the US largest supplier of motor
  vehicle parts
• In 2006, Mexican exports of motor vehicle parts
  to the US totaled 21 billion dollars, an increase
  of 7.4 from a year earlier

Million USD
Source US Department of Commerce
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MEXICO TOTAL VEHICLE SALES 2005, 2006 and 2007
Source Mexican Association of Automobile
Dealerships (AMDA)
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MEXICO TOTAL VEHICLE SALES, EXPORTS AND
PRODUCTION 2004, 2005, 2006 and 2007
Source Mexican Automotive Manufacturers
Association (AMIA)
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Production of Japanese Car Companies
Manufacturing in Mexico
In 2006, Japanese car companies were responsible
for 24 of Mexicos total production
Source Mexican Automotive Manufacturers
Association (AMIA) Automobiles
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Retail Sales of Japanese Car Companies in Mexico
In 2006 Japanese automotive companies sold
366,472 vehicles in Mexico, increasing to 32
their market share in the Mexican car market
Source Mexican Automotive Manufacturers
Association (AMIA) Automobiles New
entrants in Mexico as a result of the EPA quota
system
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Exports of Japanese Car Companies Established in
Mexico
In 2006, Japanese car companies manufacturing in
Mexico accounted for 15.2 of the country's
automobile exports
Source Mexican Automotive Manufacturers
Association (AMIA) Automobiles
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Mexico-Japan Economic Partnership Agreement

• The EPA has also contributed to the establishment
  of four new Japanese companies in Mexico that are
  now selling vehicles in the domestic market
  Mazda, Isuzu, Subaru and Suzuki . In late 2007,
  Hino motors will start commercialization of
  trucks in Mexico.
• For fiscal year 2007 (April 2, 2007 to March 31,
  2008) the EPA has allocated a quota of 56,844
  vehicles to be imported to Mexico from Japan.

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Import Quota for Japanese Car Manufacturers
(General Tariff will be eliminated in April 2011)
(Unit vehicles)
1) Car manufacturers that produce in Mexico are
given quotas for units equivalent to 10 of its
annual production2) EPA quotas are given for
units equivalent to 5 of the total sales in the
previous year3) Mitsubishi uses quotas
allocated to Daimler ChryslerSource Mexicos
Secretary of Economy