Mexico’s Automotive Industry Booming despite Slow overall Growth

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Mexico’s automotive industry is performing well in terms of production and exports, and is expected to continue its positive trajectory in the coming months, despite a slow start-of-the-year GDP overall, industry executives reported this week.

In the first five months, vehicle production rose 13.4 percent to 1,560,928 units from a year ago, said Odracir Barquera, director general of the Mexican Automotive Industry Association.

Meanwhile, car exports grew by 9.2 percent to 1,273,915 units, with the bulk of shipments going to the United States.

Mexico is the world’s fourth-largest producer of auto parts, and car sales and exports have consistently risen, except during the pandemic, when supply chain bottlenecks created slowdowns.

The promise of a new $10-billion Tesla electric vehicle (EV) plant in the northern Mexican state of Nuevo León has spurred additional interest in the country’s auto industry. which has been bedrock for the United States, accounting for about 3 million cars per year.

Notwithstanding, Mexico has been slow to embrace the EV industry, with few charging stations and an official government policy that favors carbon-based energy.

“The important thing for Mexico is that our export levels to the United States continue to grow. We continue to be the country from which most vehicles are imported into the United States,” Barquera said during a remote press conference.

The recovery of supply and demand in the industry worldwide following the covid-19 pandemic, along with greater competition, are driving vehicle prices down in some countries, such as the United States, added Guillermo Rosales, executive president of the Mexican Association of Automotive Dealers.

However, those factors should not affect Mexico as yet, he said, “since the volume designated to satisfy the North American market is performing well, and the trend is that this will continue for the coming months.”


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