Mexico is the most important supplier of auto parts for the United States
By Alejandra Oropeza
October 25, 2021
Mexico is the most important supplier of auto parts for the United States, surpassing China, Canada, Japan and Germany, said Oscar Albin , executive president of the National Auto Parts Industry (INA).
Therefore, he argued that the important thing will be to closely monitor the US economy, because as long as it continues to be a large consumer of automobiles and its economy remains, the Mexican automotive industry will remain.
“80% of what we produce in Mexico ends up in a new car factory in the United States and another 10% in car factories in Mexico, which is finally exported. In other words, 90% of production goes directly to a vehicle, so we are the industry that generates the most net foreign exchange, we are a pillar for the Mexican economy ”, he explained.
Industry contributes approximately 19% of manufacturing GDP and has close to one million jobs in automotive manufacturing. In the world ranking, Mexico is placed as the 7th producer and the 4th exporter of vehicles.
According to forecasts, Mexico, the US and Canada are expected to produce 17.03 million units by 2022; meanwhile, by 2023 they are expected to reach 16.82 million.
The president of the INA announced that in our country there are around 600 Tier 1 and 900 Tier 2 + Tn suppliers that supply and make OEMs comply with their regional content requirements.
He added that Mexico is the 5th largest auto parts producer in the world with 98 billion dollars and that the location of the most important auto parts manufacturers in the world strengthens the production chain.
"We surpassed South Korea two years ago and surely, if everything is moving in the right direction, we will be overtaking Germany, placing us in 4th place in the production of auto parts worldwide," he said.
Oscar Albin said that there are important opportunities to obtain more Foreign Direct Investment in Mexico, because in 2021, according to estimates, auto parts imported by the United States, Mexico and Canada - mainly from Asia and Europe - will reach around 93,981 million dollars .
“With the T-MEC they will have to emigrate to be manufactured and bought within the region; We believe that they will be repatriated in Mexico within the next few years and this is an opportunity for growth ”.
Some of the main auto parts imported from Asia are bodywork accessories, gearboxes and internal combustion engine parts; from Europe, gearboxes, piston engines and parts of devices for filtering or purifying liquids or gases, among others.
ELECTRIC VEHICLES
The president of the INA reported that 12% of the export of auto parts correspond to harnesses and that, currently, a vehicle has around 2,000 meters of cable . However, he considered that growth will come with the production of electric vehicles.
"In this matter, Mexico has a large participation because electric cars are growing significantly, if we are the manufacturers of 100% of the harnesses required in North America, the harnesses with the electric car are going to grow significantly."
And it is that with the entry of electric cars , more high-capacity harnesses will be needed and, in addition, they will be full of sensors that will have a driver who reaches them, so, according to Oscar Albin, the need for harnesses will grow double or triple.
SHORTNESS OF SEMICONDUCTORS
Given the shortage of semiconductors , he revealed that investments are already being carried out in the southern United States to manufacture chips; however, the manufacturing time of the machines that make this first of the production of the chips is very long.
"Companies are being installed in the United States and, right now, we are precisely working with the Ministry of Economy so that Mexico can go up, with support and incentives, to the second part of the manufacture of a chip," he reported.
He detailed that a chip is produced in two stages. “First a generic chip is manufactured –which requires a high investment, energy and water–; once it is ready it requires programming and that is where Mexico has a great opportunity ”.
“Mexico wants to complement that final part of the chips, in our country there are already companies that have facilities in Mexicali and Guadalajara where this process is carried out. That's where we have the opportunity, but those factories will start generating the chips in a year and a half or two, ”he said.
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