Mexican Auto Parts Exports Soar in First Quadmester
By THE PULSE NEWS MEXICO STAFF
Mexico’s auto parts exports increased by 27.5 percent in the first four months of 2021, compared to the same period in 2020, according to the National Auto Parts Industry Association (INA).
The surge — the largest increase since 2010 — was primarily the result of the implementation of the United States-Mexico-Canada Agreement (USMCA), which went into effect in July 2020, the INA said.
The USMCA specifies that 75 percent of the content of new cars produced in North America must originate in the region.
Among the Mexican companies that benefited from the new ruling are Grupo Vasconia and Grupo Industrial Saltillo (GIS), with its subsidiary Draxton.
“The biggest winner of the USMCA has been Mexico because it has taken advantage of each chapter of the new agreement. We have the opportunity to continue growing, manufacturing and exporting to the United States and Canada,” said INA President Alberto Bustamante.
Mexico is the fifth-largest exporter of auto parts in the world and is the number one supplier to the United States, where it ships 82 percent of its production.
Between January and April 2021, Mexico reported auto parts and vehicle accessories exports of just over $10 billion, representing a total annual increase of 22.5 percent, according to data from the Economy Secretariat.
This is the largest value ever reported by the sector for a similar period, surpassing by 2.9 percent pre-pandemic levels, and the largest annual percentage increase in 10 years.
“The fact that the United States closed its borders to imports from various nations, mainly from China, but maintained the privilege of free trade with Canada and Mexico by signing the USMCA, gave Mexican companies a great opportunity to increase sales,” said José Ramón Elizondo, president of Grupo Vasconia, a company that is expecting to triple its flat aluminum production this year.
Meanwhile, GIS reported an 18 percent increase in revenues from its Draxton auto parts business in the first quarter of 2021 and is also looking to expand capacity.