The Boom of the automotive industry in Mexico

The Boom of the automotive industry in Mexico

Agustín Delgado – May 25, 2015

Since 2010, the Mexican automotive industry has shown a dynamic and continuous growth becoming a cornerstone of the economic development in Mexico despite the apparent adversity that the country has faced. What is causing this boom and what is the Mexican economy expecting for the coming years?


The automotive sector in Mexico has been very attractive to global OEMs (Original Equipment Manufacturer for its acronym in English). A demonstration of this has been the attraction of 10 of the major automakers worldwide (General Motors, Ford, Chrysler Volkswagen, Nissan, Honda, BMW, Toyota, Volvo and Mercedes-Benz). In addition, another proof is the continuous investment that automakers make to expand their actual production plants or to build new plants in the country; a recent example is Ford and Toyota investments of more than three billion dollars.

Why the big automakers choose to invest in Mexico?

  • Mexico has signed trade agreements on three continents and this gives access to a potential market of more than one billion consumers and 60% of world GDP; something that not all countries in the world can offer.
  • The automakers have found that production costs in the country are significantly lower than in other parts of the world.
  • The quality of automobile production in Mexico has caused that automakers choose the country as a production platform because it provides the right environment for the production of luxury vehicles.
  • Mexico has a privileged location for export allowing automakers to send cars practically anywhere.
  • Economic stability with disciplined economic policies, low imbalances and a well-capitalized banking sector.

Is there data that reflect the great moment that the country is going through? The answer is yes. Between 2010 and 2014, the amount of investments made by automakers were of 19 billion dollars. Even more, the production of cars has doubled in the past five years to an estimated of 3.2 million vehicles in 2014, positioning Mexico as the seventh largest producer of cars and the fourth largest exporter in the world.

To conclude, it is clear that Mexico is becoming a powerhouse in the automotive sector but, what´s the forecast for the next few years? In accordance to the Mexican Association of Automotive Industry (for its abbreviation in Spanish AMIA) OEMs will continue to make investments in the country and by 2020 Mexico is expecting to be within the three major world auto producers, producing 5 million vehicles per year.