Mexico gains share in US automotive imports

Mexico reached a 37.9% share of total automotive imports to the United States from January to September 2022, an all-time high, according to data from the Commerce Department.

In the first nine months of the current year, Mexico shipped automotive products with a customs value of 110.892 million dollars, which represents a year-on-year increase of 17 percent.

This group of products includes cars, trucks, auto parts, buses, trucks and special vehicles.

Mexico is by far the first external supplier of automotive goods in the US market and the value of its exports to that destination was almost double (+91%) compared to a decade ago, totaling 57,989 million dollars from January to September 2012.

These results for Mexico come after the entry into force, since July 2020, of the Treaty between Mexico, the United States and Canada (T-MEC), which contains new stricter rules of origin for automotive products, designed to encourage the investment, production, and good-paying jobs in North America.

Considering the periods from January to September, Mexico advanced 1.3 percentage points in its share of total US automotive imports in 2022, compared to its coverage in 2020 and 2021, when in each of the two years it was 36.6 percent.

According to the United States Trade Representative (USTR), the data shows that, in the two years since the entry into force of the T-MEC, vehicle and parts producers have made significant investments in sourcing and production in North America to meet the rules of origin.

Producers are also taking advantage of the flexibilities offered by the T-MEC to prepare future production -including new electric vehicles- to comply with the rules of the Treaty.

Although the industry reports that there are complexities associated with adapting to the new record keeping and calculations required by the USMCA rules of origin, the industry is complying with these administrative requirements.

The industry further reports that the increased complexity of regulations has tested producers who are simultaneously dealing with critical input shortages, supply chain challenges resulting from the Covid-19 pandemic and, more recently, war. of Russia in Ukraine.

Established automakers in Mexico include Audi, Baic Group, BMW, Stellantis (made up of FCA and PSA Group), Ford, General Motors, Honda, Kia, Mazda, Nissan, Toyota, and Volkswagen.

The United States imported automotive products from around the world worth 292,225 million dollars in the first nine months of 2022, an increase of 12.8%, at an annual rate.

In turn, the main truck manufacturers in Mexico are Cummins, Detroit Diesel Allison, Freightliner-Daimler, Kenworth Mexicana, Mack Trucks de Mexico, International-Navistar, Dina Trucks, Scania, Volvo Group VW, Man Truck & Bus, Mercedes- Benz, Hino Motors and Isuzu Motors.

After Mexico, Canada was the second supplier, with 36,982 million dollars and a share of 12.7% percent.

Finally, other relevant suppliers of automotive products to the US market from January to September 2022 were: Japan (35,493 million dollars), South Korea (23,896 million) and Germany (21,320 million).

roberto.morales@eleconomista.mx