When we think of the leading names in the auto industry, it’s easy to assume that the most reliable, desirable commercial vehicles are made in Europe, the U.S., and Asia. But the past few decades have seen many leading brands move substantial parts of their car manufacturing to Mexico, which is now the #3 global leader in automotive manufacturing.

What cars are made in Mexico?

Toyota, Volkswagen, Nissan, and Kia have planted flags in Mexico, and more could be en route. 

In this guide, we’ll go over some of the most popular Mexican cars, where they’re produced, and why so many companies are nearshoring to Mexico.

Toyota Vehicles Made in Mexico

Based in Japan, Toyota is the parent company for Lexus, Subaru, and Hino motors. Thanks to the popularity across all of these subsidiaries, Toyota is now the world’s largest automaker.

How has the company been able to sustain growth and profitability to overtake the competition?

The auto industry powerhouse has invested significantly in its Mexico manufacturing operations.

Toyota has plants in two major manufacturing areas in Mexico:

• Tijuana (Baja California state) – The Toyota Motor Manufacturing de Baja California (TMMBC) opened in 2002. Since then, it has produced more than 160,000 vehicles per year. This city’s location close to the U.S. border in California makes it an ideal location for exportation to North American markets.
• Guanajuato (Guanajuato) – Toyota invested over 1 billion dollars to open the Toyota Motor Manufacturing de Guanajuato (TMMGT), which began production in 2019. Now, the plant can produce up to 200,000 vehicles per year. The central-Mexican state of Guanajuato is Northwest of Mexico City and is the fastest-growing manufacturing area in the country.

The commercial vehicles manufactured in these facilities include:

• The midsize Toyota Tacoma truck 
• The Toyota Yaris iA truck

The Volkswagen Group in Mexico

The longstanding German automaker Volkswagen is the parent company of several luxury car brands, including:

• Porsche
• Audi
• Bentley
• Bugatti

The second-largest automobile manufacturer after Toyota, Volkswagen has manufacturing operations throughout the world. In Mexico, it operates through a foreign subsidiary, Volkswagen de México S.A. de C.V.

Volkswagen’s Mexico locations include:

• Puebla (Puebla) – Seeing the potential in the Mexican market, Volkswagen began building its Southcentral plant in Puebla, Mexico in the 1960s, where it has been continuously in operation since 1967. VW’s Puebla factory is the country’s largest auto manufacturing facility and can produce over 400,000 vehicles in a single year. The factory in Puebla originally produced the Volkswagen Beetle but had since expanded to other classic Volkswagen models, including:

• • VW Jetta
  • VW Golf
  • VW Tiguan

• San José Chiapa (Puebla) – In 2016, Volkswagen Group brand Audi opened an additional plant in the state of Puebla to produce the Audi Q5. This location can produce up to 150,000 cars per year for the American market.
• Guanajuato – Volkswagen has been in operation in Guanajuato since 2013. In 2020, the manufacturer announced they would invest another $233.5 million to expand this plant’s production capacity. 
• Querétaro (Querétaro) – Volkswagen also locates some of its manufacturing in Querétaro, which is close to Puebla.

Chevrolet and GM Cars in Mexico

Since the 1990s, the growth of the auto manufacturing industry in Mexico has been particularly beneficial for U.S. car companies thanks to the NAFTA trade agreement. In 2020, this longstanding agreement was replaced with the USMCA, which further incentivized North American car manufacturing.

So perhaps it’s no wonder that GM subsidiary Chevy manufactures several of its popular vehicles in Mexico. These include:

• Chevrolet Silverado Crew Cab truck
• Cruze hatchbacks
• Equinox SUV
• Tracks SUV

Like Volkswagen and Toyota, GM maintains several plants throughout Mexico. Important locations include:

• San Luis Potosí (San Luis Potosí) – The GM San Luis Potosí plant, also known as SLP, opened in 2008. Located Northwest of Mexico City, this large facility can produce 160,000 vehicles per year.
• Ramos Arizpe (Coahuila) – The GM Ramos Arizpe facility has been in operation since 1981. Over the course of its history, it’s produced cars for many GM family brands, including Buick and Pontiac. It currently produces Chevy Equinox and Blazer vehicles as well as propulsion systems for other vehicles.

Kia’s New Presence in Mexico

Founded in South Korea, Kia is the number one mass-market automobile brand, and to fulfill the growing command for its economy cars, Kia has expanded production to Mexico.

In 2017, Kia opened a new factory in Monterrey, Nuevo Leon (Northeastern Mexico), where it can produce over 200,000 vehicles per year.

Models produced in Mexico include:

• Kia Rio
• Kia Forte
• Hyundai Accent

Interestingly, Kia is not exporting most of these vehicles to the U.S. market. Instead, the company is taking advantage of this geographic foothold to export its vehicles throughout Latin America, targeting consumers in Chile, Peru, Costa Rica, Panama, and beyond.

The Kia cars manufactured in Mexico are also exported to Africa and throughout the world.

Other Cars Produced in Mexico

As you can see, a wide range of cars—from luxury SUVs to economy sedans—are produced in Mexico. Below, we’ll go through some additional car brands, not mentioned above, that also hold their production operations in Mexico.

• BMW 5 Security Series – BMW has comparatively few manufacturing facilities in Mexico. However, this popular SUV is made in Toluca, the capital of Toluca state, which lies southwest of Mexico City.
• Fiat 5000 – This iconic Italian car is also made in Toluca.
• Ford Fiesta & Ford Fusion – Iconic U.S. manufacturer Ford produces cars at facilities located in Hermosillo, Sonora in the Northwestern border region and Cuautitlán, State of Mexico, in Central Mexico.

Don’t see your vehicle on this list? That doesn’t mean it wasn’t made in Mexico! All of the top 10 auto manufacturers now locate some part of their vehicle production process in Mexico.

Why the Automotive Industry is Growing in Mexico

We’ve already mentioned one of the reasons for locating manufacturing in Mexico: the USMCA trade agreement incentivizes North American manufacturing. Under new USMCA guidelines, a vehicle must be 75% manufactured in Mexico to qualify for tariff-free export to the U.S.

How does that benefit foreign manufacturers like Toyota and Volkswagen?

• Many large international companies choose to do business under foreign subsidiaries. That means goods manufactured by Volkswagen de México S.A. de C.V. for export to the U.S. market could qualify for zero tariffs (assuming they meet sourcing requirements).
• Besides its treaty with the U.S. and Canada, Mexico has free trade agreements with numerous other nations throughout North America, South America, and the world. For brands like Kia, Mexico is an excellent springboard for access to global markets.
• As Mexico’s economy grows, there are even more robust opportunities for marketing vehicles to consumers in Mexico.

Aside from free trade agreements, there are several other reasons for the continuing boom in auto manufacturing.

Shortened Supply Chain

While China is still a major player in automotive manufacturing, nearshoring or reshoring production to Mexico can dramatically cut the journey that individual auto parts take before reaching their end-point consumer.

A shorter supply chain means:

• Few opportunities for delays at ports of entry – Preferential tariffs, informal entry processes, and fewer modes of transportation can all speed up the process of receiving and delivering inventory.
• Less spending on transportation – Since your goods travel across a shorter distance, you’ll pay less in fuel and insurance while they’re on the move.
• Reduced environmental impact – If your corporate goals include reducing carbon emissions, shortening your supply chain can give you a leg up.

Since so many companies have paved the way, there are well-established supply chains for materials as well as streamlined transportation options.

Qualified Labor Force

Thanks to a long history of manufacturing, Mexico’s labor force is well-trained. Automakers beginning a business in Mexico will have no difficulty finding qualified, skilled direct labor and indirect labor for tasks like:

• Management
• Quality control
• Engineering

Affordable Costs

While USMCA rewards manufacturers who pay higher wages, many companies see lower vehicle production costs when meeting their Mexican payroll requirements.

How NAPS Can Help You Strategize

Are you interested in moving your manufacturing to Mexico?

While there’s a world of opportunity in nearshoring, successful market entry requires careful strategy. For starters, what’s the ideal region for your facility? Is it important to be close to the Northern border, or would it be advantageous to set up operations in an emerging central Mexican industrial city?

At NAPS, we guide companies through the process of setting up shop in Mexico, helping you make choices like the following:

• The right location
• Whether to build or lease an industrial space
• Whether to operate through a foreign subsidiary, partnership, or shelter service
• How to manage payroll

Get in touch today to learn more about our full suite of services and how quickly you could begin manufacturing in Mexico. 

 

Sources: 

Auto blog. Toyota investing $1 billion in Mexico plant.  https://www.autoblog.com/2015/04/16/toyota-guanajuato-mexico-plant-official/

Auto Guide. Which cars are made in Mexico? https://www.autoguide.com/auto-news/2015/04/which-cars-are-made-in-mexico.html

Volkswagen. #TBT. https://newsroom.vw.com/vehicles/tbt-the-rich-history-of-volkswagens-puebla-plant/

Mexico Now. Volkswagen de México to invest US$233.5 million in Guanajuato. https://mexico-now.com/volkswagen-de-mexico-to-invest-us233-5-million-in-guanajuato/

General motors San Luis Potosí plant. https://gmauthority.com/blog/gm/gm-facilities/gm-mexico-facilities/gm-san-luis-potosi-plant/

General motors Ramos Arizpe plant. https://gmauthority.com/blog/gm/gm-facilities/gm-mexico-facilities/gm-ramos-arizpe-plant/

Hyundai. Kia Mexico Plant.  https://www.hyundaimotorgroup.com/About-Us/Global-Plant/Kia-Mexico-Plant-Eng.hub

Auto brain. Your bodyguard made in Mexico. https://www.autoarabia.org/articles/255/BMW%20X5%20Security:%20Your%20body-guard%20Made-In-Mexico