5/3/2023 Markets & Industries News
Motor vehicle industry in Mexico on the upswing
Automobile production is the backbone of Mexican industry, according to Germany Trade & Invest (GTAI), Germany's foreign trade and investment agency, in a recent report on market trends. The chances for further growth in the sector are good.
Earlier this year, various organizations reported that the Mexican automotive industry was attracting more investors than any other in the country. According to the latest market trends Germany Trade & Invest (GTAI), Germany's foreign trade and location marketing company, the relocation of production by numerous international corporations in the automotive sector to Mexico will increase even further in the medium term. The country is and remains extremely attractive for manufacturers and suppliers. This is reflected in multi-million investments in Mexican production sites, such as the BMW Group's in February 2023. Or the high number of visitors at the first EUROGUSS MEXICO.
The growth of the Mexican market is evident at EUROGUSS MEXICO.
Reasons for this are vulnerabilities of the globalized supply chains, political risks, or stricter rules of origin for the automotive sector in the course of the United States-Mexico-Canada Agreement (USMCA). The agreement stipulates, for example, that the regional share of value added in the automotive sector must be 75 per cent or that the hourly wage of workers must be at least 16 US dollars.
Identified market trends of the GTAI compact
- The relocation of production by numerous international corporations in the automotive sector to Mexico is likely to increase further in the medium term.
- Increased prices for passenger cars and higher interest rates will dampen demand in 2023. Chinese manufacturers are gaining market share.
- The Mexican automotive industry is retooling to produce electric cars. Numerous manufacturers have announced corresponding investments in their plants.
- Import procedures for cars and car parts have been digitalized in recent years. Due to numerous trade agreements, customs regulations must be strictly observed.