Opportunities for Dutch Businesses in the Mexican Automotive Industry
Mexico’s automotive industry in Mexico represents the country ́s second most important economic sector, accounting for roughly 3.8% of Mexico ́s GDP in 2019. Worldwide, Mexico is the 6th largest vehicle manufacturer, totaling close to 4 million vehicles in 2019 and exporting over 85 percent. The production value of light vehicles, auto parts, heavy vehicles, bodyworks, and trailers together accounted for US$143.3 billion last year. Over 40 auto brands are produced by the world’s leading OEMs, with Nissan, General Motors (GM) and Volkswagen being the largest players in the country.
A skilled labor force at low costs, Mexico ́s proximity to the United States of America (US), the tight relations between the two countries -and Canada- under the North American Free Trade Agreement (NAFTA), and its strategic geographical location, are only some of the reasons for the industry ́s success. Industry dynamics and the political climate in North America have situated Mexico in the center of the global automotive industry, offering a cost-competitive production environment for car makers from Asia, Europe, and North America. Recently ratified trade agreements, in particular the EU-Mexico Treaty, the Trans-Pacific Partnership (CPTTP) and the USMCA FTA enhance Mexico ́s attractiveness, especially due to Regional Value Content (RVC) requirements. The US-China trade war also increases the attractiveness of manufacturing in Mexico.