Mexico manufacturing of automobiles hit a record high in 2013. The Mexican Automotive Industry Association (AMIA) reported an increase of 1.7 percent over the previous year, bringing the yearly total to 2.93 million vehicles produced.
Production growth is readily apparent in Mexico, with automotive giants Nissan, Mazda, Honda, Volkswagen, and Audi all building assembly plants to join the existing Chrysler, Fiat, Ford, General Motors, and Toyota.
Driven largely by increasing sales to the United States – up 10 percent in 2013 – and bolstered by further strong sales both worldwide and domestic, Mexico manufacturing is leading the economic recovery in Mexico.
Exports have been strong. In addition to the 10 percent increase to the United States – nearly 1.65 million in 2013 – Canadian exports rose 22 percent to nearly 195,000, and domestic sales rose 7.7 percent to top one million.
Eduardo Solis, president of AMIA, told press that “Mexico again reaches a record figure,” and that Mexico holds its position as the fourth-largest auto exporter globally.
The manufacturing growth is the latest success in a four-year consecutive streak of increases. Mexico’s automobile production is now ranked as the fastest growing manufacturing cluster. With strong tax and other incentives offered to foreign companies, combined with a history of low-cost, quality production, Mexico is the global hotspot for automotive production growth.
The most rapid growth has been seen in the central states of Guanajuato and Aguascalientes.
Guanajuato, Mexico’s fastest growing state for manufacturing, is planning to host new plants from Honda, Mazda, and Volkswagen in 2014, with an additional 300-plus supplier companies by 2015. Aguascalientes is planning to host Nissan and hundreds more supplier companies.
Some of the credit for the four-year streak lies with Mexico’s IMMEX program (formally know as the Maquiladora Program), which allows manufacturing products to be temporarily imported for production without incurring certain taxes and duties. The IMMEX program in Mexico allows automobile suppliers to take full advantage of Mexico’s strong manufacturing economy. The Mexico Federal Government estimated that 85% of Mexico’s manufactured exports take advantage of this program, many of which use shelter companies, such as North American Production Sharing, Inc. (NAPS), to help with the administration and compliance management of the program.
With strong interests from the United States, Canada, Japan, Europe, and growing interest globally, the Mexican industrial landscape is demonstrating its strength not only in hosting the already strong existing automobile economy, but also in its ability to handle the rapid growth of new interests. With the influx of new corporations and supplier and support companies, it is now easier than ever for an automobile manufacturer to thrive in Mexico.
Four years of solid growth has created a strong foundation for future success. While AMIA has not yet released its projections for 2014, the combination of strong sales and economic recovery have created an exciting landscape for existing and new businesses to continue setting annual records for the foreseeable future.