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Mexico's Automotive Industry

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Mexico's Automotive Industry

  1. 1. Mexico’s Automotive Sector May 2007 Prepared by: Office of Representation of Mexico’s Secretary of Economy in Japan Mexico-Japan Economic Partnership Agreement Embassy of Mexico Email: [email_address] , Tel. 3506-6681
  2. 2. Mexico’s Automotive Sector <ul><li>Mexico’s automotive industry is one of the country’s most important sectors in terms of FDI, exports, and employment </li></ul><ul><li>Mexico is one of the top ten global manufacturers of vehicles </li></ul><ul><li>In 2006, Mexico produced 1,978,771 vehicles </li></ul><ul><li>During the first four months of 2007, Mexico produced 597,382 automobiles </li></ul>Number of Vehicles Source: Mexican Association of Automotive Industry (AMIA) Mexico’s annual vehicle production
  3. 3. Mexico: Among the World’s Top Ten Countries in the Production and Exports of Automobiles Automotive products and finished vehicles produced in Mexico are exported to more than 30 countries, including Japan, under preferential market access through Mexico’s FTA network FTA EFTA FTA European Union CEA – Argentina FTA Chile FTA Nicaragua FTA Costa Rica FTA Bolivia FTA Colombia NAFTA FTA Japan FTA Honduras El Salvador and Guatemala FTA Israel CEA – Brazil FTA Uruguay
  4. 4. Mexico’s Automobile Exports Number of Vehicles Source: Mexican Association of Automotive Industry (AMIA) <ul><li>In 2006, Mexico exported 1,536,768 vehicles, a 29.5% increase from the previous year </li></ul><ul><li>From January to April 2007, Mexico exported 449,338 vehicles </li></ul>
  5. 5. Mexico’s Autopart Industry <ul><li>The autopart industry in Mexico comprises approximately 350 companies in the Tier 1 category. About two thirds of those companies are foreign owned </li></ul><ul><li>Mexico needs to expand its manufacturing base in Tier 2 and 3 suppliers. The Mexico-Japan EPA represents an opportunity to Japanese autopart companies in Mexico’s growing automotive manufacturing sector </li></ul>
  6. 6. Structure of Mexico’s Auto Parts Industry Assemblers 345 companies (mostly foreign) 14 companies Source: INA (Mexico’s National Industry of Autoparts) 7.0% of Total Manufacturing GDP 8.1% of Total Manufacturing Exports Total Production: 1.677 Billion Dollars (Estimated, 2004) Parts Suppliers Approx. 1,000 companies (About 30% are domestic) Casting Components, Press, Plastic, Aluminum, Logistics, Bearing, Machining, Die Casting & Molding, Machine Tools Air Conditioning, Engine Components, Steering, Suspension, Logistics, Die Casting & Molding, Electronic Components Tier 2 Tier 1 Tier 3
  7. 7. Strengthening of Mexico’s Support Industries <ul><li>Mexico’s Ministry of Economy Fosters the Formation of Supporting Industries in the Auto Parts Sector </li></ul>Strengthening Mexican Small and Medium Enterprises Strengthening Competitiveness of Japanese Companies in Mexico Formation of Mexico-Japan Supply Chain Win-Win Business Opportunities Strategic Alliances between Japanese SME’s and Mexican companies to become suppliers
  8. 8. Mexico’s Exports of Autoparts <ul><li>According to the US Department of Commerce, in 2006, Mexico was the US largest supplier of motor vehicle parts </li></ul><ul><li>In 2006, Mexican exports of motor vehicle parts to the US totaled 21 billion dollars, an increase of 7.4% from a year earlier </li></ul>Motor Vehicle parts imported by the US in 2006 Million USD Source: US Department of Commerce
  9. 9. MEXICO TOTAL VEHICLE SALES 2005, 2006 and 2007 Source: Mexican Association of Automobile Dealerships (AMDA) 1,129,353 2005 415,974 COMMERCIAL VEHICLES 713,379 PASSENGER VEHICLES 1,136,871 2006 455,929 COMMERCIAL VEHICLES 680,942 PASSENGER VEHICLES 278,627 January-March 2007 112,141 COMMERCIAL VEHICLES 166,486 PASSENGER VEHICLES
  10. 10. MEXICO TOTAL VEHICLE SALES, EXPORTS AND PRODUCTION 2004, 2005, 2006 and 2007 Source: Mexican Automotive Manufacturers Association (AMIA) 1,606,460 1,186,346 1,128,397 1,131,768 2005 1,978,771 1,536,768 1,160,037 1,139,718 2006 1,507,175 1,094,306 1,096,777 1,095,796 2004 Total Production Exports SALES Whole Sales Retail Sales 597,382 449,338 349,605 355,235 January-April 2007
  11. 11. Production of Japanese Car Companies Manufacturing in Mexico Source: Mexican Automotive Manufacturers Association (AMIA) * Automobiles In 2006, Japanese car companies were responsible for 24% of Mexico’s total production 184,252 9,480 167,638 7,134 2007 Acum. 40,165 1,922 37,301 942 April 49,843 5,226 42,467 2,150 March 44,994 2,332 40,750 1,912 February 25 n.c. 17 3.1 2006- 2005 % 49,250 -- 47,120 2,130 January 23.8 - 18.8 30.1 - 12.9 Jan-April 06/07 % 465,910 33,209 408,439 24,262 Total 2006 Total* Toyota Nissan Honda  
  12. 12. Retail Sales of Japanese Car Companies in Mexico Source: Mexican Automotive Manufacturers Association (AMIA) * Automobiles ** New entrants in Mexico as a result of the EPA quota system In 2006 Japanese automotive companies sold 366,472 vehicles in Mexico, increasing to 32% their market share in the Mexican car market 24,678 4,549 329 34 14,115 954 1,154 3,419 124 April 31,680 5,804 401 40 18,358 1,500 1,356 4,097 124 March 166,204 18,876 1,528 163 69,760 5,245 4,776 15,224 578 2007 Acum 30,974 4,357 448 44 19,261 1,478 1,100 4,112 174 January 0.7 70.1 n.c. n.c. -2.8 11.6 n.c. 23.9 58.3 % 2006-2005 366,472 60,088 4,413 308 228,315 16,751 7,495 47,471 1,631 Total 2006 3.9 16.9 24.3 n.c. - 3.2 1.4 168.9 1.6 37 % Jan-April 06/07 28,872 4,166 404 45 18,026 1,313 1,166 3,596 156 February Total* Toyota Suzuki ** Subaru ** Nissan Mitsubishi Mazda ** Honda Acura
  13. 13. Exports of Japanese Car Companies Established in Mexico Source: Mexican Automotive Manufacturers Association (AMIA) * Automobiles In 2006, Japanese car companies manufacturing in Mexico accounted for 15.2% of the country's automobile exports 20,366 1,922 18,294 150 April 35,018 5,226 27,890 1,902 March 28,111 2,332 24,639 1,140 February 109,348 9,480 95,557 4,347 2007 Acum. 25,889 -- 24,734 1,155 January 29.5 n.c. 33.5 4.2 % 2006-2005 76.4 n.c 67.9 - 14.2 % Jan-April 06/07 234,038 10,111 208,820 15,107 Total 2006 Total* Toyota Nissan Honda  
  14. 14. Mexico-Japan Economic Partnership Agreement <ul><li>The EPA has also contributed to the establishment of four new Japanese companies in Mexico that are now selling vehicles in the domestic market: Mazda, Isuzu, Subaru and Suzuki . In late 2007, Hino motors will start commercialization of trucks in Mexico. </li></ul><ul><li>For fiscal year 2007 (April 2, 2007 to March 31, 2008) the EPA has allocated a quota of 56,844 vehicles to be imported to Mexico from Japan. </li></ul>
  15. 15. Import Quota for Japanese Car Manufacturers (General Tariff will be eliminated in April 2011) (Unit: vehicles) *1) Car manufacturers that produce in Mexico are given quotas for units equivalent to 10% of its annual production *2) EPA quotas are given for units equivalent to 5% of the total sales in the previous year *3) Mitsubishi uses quotas allocated to Daimler Chrysler Source: Mexico’s Secretary of Economy 121,890 121,297 56,585 54,839 65,305 58,218 Total 0 0 0 0 0 0 Unused Quota 500 0 500 0 0 0 Subaru 1,221 1,900 1,221 1,900 0 0 Isuzu 4,092 3,000 4,092 3,000 0 0 Suzuki 5,502 340 5,502 3,340 0 0 Mazda 11,315 8,240 11,315 8,240 0 0 Newly Entered in Mexico 17,102 17,317 7,102 7,317 10,000 10,000 Mitsubishi*3 23,487 22,664 6,487 6,664 17,000 16,000 Toyota 17,652 13,900 8,652 8,900 9,000 5,000 Honda 52,334 50,936 23,029 23,718 29,305 27,218 Nissan 110,575 104,817 45,270 46,599 65,305 58,218 Established in Mexico 2006 2005 2006 2005 2006 2005 Total*2 M-J EPA Quota Unilateral Quota*1 Company

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