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2010 - Crossborder Informa: Mexico Auto Industry Racing Ahead?


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Short Crossborder Group briefing from Aug 2010 focused on Mexico's rebounding and fast-growing automotive industry - as well as some implications for future growth in this important, North American industry. Includes statistics on passenger vehicle/light truck production in Mexico during 2008-2010 period.

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2010 - Crossborder Informa: Mexico Auto Industry Racing Ahead?

  1. 1. CrossborderINFORMA Research :: Analysis :: Insights A review of recent business, industry & policy research by, a division of Crossborder Group August 2010 After Recession Pitstop, Is Mexicos Auto Industry Racing Ahead?Since peaking in late-2008, the auto industry in Mexico has been just one of the casualties in the globaleconomic crisis: by January of 2009, production of passenger vehicles and light trucks at Mexicanmanufacturing facilities had dropped by more than half – a situation that continued throughout much of2009. As the crisis has abated, however, andconsumer demand has returned, a number ofindications exist that Mexico’s automotive industryhas not only largely recovered, but may acceleratein 2011 and beyond: • As seen at right, during the first six months of 2010, Mexico’s production of passenger vehicles and light trucks has turned around – averaging nearly 180,000 vehicles per month, and over 1 million vehicles so far this year; • Also, despite recent negative reports about foreign investment generally, investors have actually brought more than US$15.7 billion in auto industry investments to Mexico between 2000 and 2009 – 86% of which flowed into just eight states of Mexico (including DF), making for a highly- concentrated market of OEMs and their Distrito Federal $3,704.8 suppliers. Chihuahua $2,831.8More encouraging are new numbers that have Puebla $1,866.0significant implications for Mexico’s automotive Estado de México $1,506.6future: OEMs like Chrysler, Ford, GM, Nissan andVolkswagen have all announced increased capacity Nuevo León $1,442.4expansions and/or retrofits in Mexico during 2010 – Guanajuato $862.5leading some industry analysts to estimate that Top 8 States forMexico’s share of auto production will grow to Coahuila $712.1 Foreign Investmentnearly one-fifth of all North American vehicles by in Automotive Industry Aguascalientes $676.9 (2000-2009, US$ millions)the end of this decade.Two examples of this future growth: Volkswagen’s mid-July announcement of a three-year, US$1billion expansion of their Puebla manufacturing site (one that may also gain even more investment:North America’s newest engine plant); and BMW’s announcement in June to increase auto supplypurchases from approximately US$615 million in 2009 to US$2.4 billion by 2012 – a high-octane boost tosuppliers (and industry stabilization) in Mexico.Look for Crossborder’s more-detailed Mexico auto industry report available online September 1, 2010. For moreinformation or assistance with Mexico’s industries and opportunities, contact the binational research andconsulting staff of Crossborder Group at Crossborder Research :: Strategies :: Market Entry Solutions :: 1.888.4XBORDER :: Crossborder Group Inc.: Crossborder NS, S de RL de CV: Paseo de los Heroes 10289, Primer Piso 107-A, Zona Rio, Tijuana, Baja California 22010 MEXICO