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.

1. CrossborderINFORMA
Research :: Analysis :: Insights
A review of recent business, industry & policy research
by CrossborderBusiness.com, a division of Crossborder Group
August 2010
After Recession Pitstop, Is Mexico's Auto Industry Racing Ahead?
Since peaking in late-2008, the auto industry in Mexico has been just one of the casualties in the global
economic crisis: by January of 2009, production of passenger vehicles and light trucks at Mexican
manufacturing facilities had dropped by more than half – a situation that continued throughout much of
2009. As the crisis has abated, however, and
consumer demand has returned, a number of
indications exist that Mexico’s automotive industry
has not only largely recovered, but may accelerate
in 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 $2,831.8
More encouraging are new numbers that have Puebla $1,866.0
significant implications for Mexico’s automotive
Estado de México $1,506.6
future: OEMs like Chrysler, Ford, GM, Nissan and
Volkswagen have all announced increased capacity Nuevo León $1,442.4
expansions and/or retrofits in Mexico during 2010 –
Guanajuato $862.5
leading some industry analysts to estimate that Top 8 States for
Mexico’s share of auto production will grow to Coahuila $712.1 Foreign Investment
nearly 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$1
billion 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 supply
purchases from approximately US$615 million in 2009 to US$2.4 billion by 2012 – a high-octane boost to
suppliers (and industry stabilization) in Mexico.
Look for Crossborder’s more-detailed Mexico auto industry report available online September 1, 2010. For more
information or assistance with Mexico’s industries and opportunities, contact the binational research and
consulting staff of Crossborder Group at Answers@CrossborderBusiness.com
Crossborder Research :: Strategies :: Market Entry Solutions :: 1.888.4XBORDER :: Answers@CrossborderBusiness.com
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