Mexican Automotive
Industry
Eduardo J. Solís
Executive President
Mexican Automotive
Industry Association
Mexican Automotive Industry
• Contributes with 3.5% of
total GDP and 19.8% of
manufacturing industry
GDP.
• Impacts more than 23
industrial sectors.
• Employs13.4% of total
industrial labor (2010).
Automotive GDP in Mexico
Light Vehicles
Assembly Plants in Mexico
New plants announced:
Source: AMIA.
Research Centers and
Auto Test Tracks in Mexico
Source: Unidad de Inteligencia de Negocios – PROMEXICO.
Investment
• Mexico's automobile and auto parts manufacturers represented 20.8% of total
foreign direct investment (FDI) in 2012.
• Automobile and auto parts industries investment for 2006-2012 period added
13.283 billion dollars, an 8.8% share of total FDI received in Mexico during
that period.
Automotive Foreign Direct Investment
(million dollars)
Production and Exports
• Mexico is ranked as the 8th vehicle manufacturer and the 4th
exporter in the world.
Light Vehicles Production
Light Vehicles Exports
3,000,000
3,000,000
Jan-Jul 2013
Jan-Aug 2013
Jan-Aug 2014
2,500,000
2,000,000
2,000,000
1,500,000
1,500,000
1,000,000
1,000,000
500,000
500,000
0
0
Brazil
Mexico
Thailand
Source: ANFAVEA, AMIA, FOURIN y ADEFA.
Argentina
Jan-Jul 2014
2,500,000
Japan
Germany
Korea
Mexico
Source: JAMA, VDA, KAMA, AMIA, ANFAVEA y ADEFA..
Brazil
Argentina
Mexican Automotive Industry
Production and Exports
• 2013:
– Contributed with 3.5% of total world production.
– More than 80% of total production goes to foreign markets.
– Contributes with 22.5% of total value of Mexican industry sector exports.
2,128,634
domestic
foreing
1,986,579
2,933,465
2,884,869
2,260,774
Light vehicle exports
3,000,000
2,500,000
2,000,000
2008
2009
2010
2011
2012
1,732,262
2,355,564
2007
1,580,724
2,143,884
2006
2,423,084
1,859,517
0
1,223,333
500,000
500,000
1,661,406
1,000,000
1,000,000
1,613,313
1,500,000
1,500,000
1,536,777
2,000,000
1,507,527
2,500,000
2,102,801
3,000,000
2,022,241
3,500,000
2,557,550
Light vehicle production
0
2007
2008
2009
2010
Source: AMIA, with member’s data.
2011
2012
2013 Jan-Aug Jan-Aug
2013
2014
2013 jan-aug jan-aug
2013 2014
Production of vehicles and trucks
Production Value *
66.1%
36.1%
33.9%
30.0%
Imported
• 66.1% content of
vehicle produced in
Mexico is supplied
or added
domestically.
National
Intermediate demand
Gross value
added
Source: INEGI. Sistema de Cuentas Nacionales. Matriz de Insumo-Producto. Matriz simétrica a precios básicos, 2008.
* Production Value = Intermediate demand + Gross value added
Mexico IS the second major supplier
of light vehicles for US market
• 11.1% of US domestic market is
supplied with Mexican vehicles
(January-august 2014)
• Mexico is second vehicle supplier only
after Canada, (January-august 2014).
Automotive Trade
• The automotive trade
is positive, in 2013 it
was 38.77 billion
dollars.
40,000
35,000
30,000
11%
25,000
20,000
15,000
5,000
5,333
5,315
8,216
9,436
8,499
9,308
10,554
10,970
10,906
9,088
9,802
8,844
9,089
13,330
14,411
15,346
13,202
23,760
28,917
32,244
38,774
20,782
23,094
10,000
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
jan-jun 2013
jan-jun 2014
• The automotive trade
was 4.5 times the oil
products trade.
45,000
Million dollars
• In 2013 automotive
exports were 1.7
times crude oil
exports and 3.3 times
of remittances.
Automotive Trade*
Source: BANXICO.
* Automotive includes: 8702 - Vehículos automóviles para el transporte => 10 personas; 8703 - Automóviles tipo turismo; 8704 - Vehículos para
transporte de mercancías; 8706 - Chasises con motor; 8707 - Carrocerías; 8708 - Partes y accesorios de vehículos; y 8711 - Motocicletas.
Remunerations
Manufacture
industry
Remunerations in the
automotive industry
are more than double
those of the
manufacturing factor.
9,354
Auto parts
manufacture
12,162
Automotive
and trucks
manufacture
21,582
-
5,000
10,000
15,000
Pesos per month
20,000
Source: INEGI. Censos económicos 2009.
* Las remuneraciones consideran el promedio de todo el personal ocupado incluido en nómina, incluye sueldos salarios y prestaciones.
25,000
When the OEM’s decide
for their location of new
investments … Why
Mexico?
5 major elements that are making Mexico
attractive for major investments
i.
Geographic Location.
ii.
Zero tariffs in major markets - Network of trade agreements
with major regions around the world -.
iii.
Strength of the automotive supply chain.
iv.
Young and eager to learn human resources (technicians
and engineers).
v.
Economic Stability.
…and very important: the Government is a major partner to help
land investments!
… and the opportunity in
the supply of auto parts.
Industry Location (T1 Suppliers)
- Illustrative -
Source: AMIA with INA’s data
Supply Capacity
Source: PROMEXICO. The Auto Parts Industry, Business Intelligence Unit.
Supply Capacity
Source: PROMEXICO. The Auto Parts Industry, Business Intelligence Unit.
Autoparts imports
in United State
2013
17,053
Mexico
2012
9,197
Canada
8,792
Japan
6,991
China
4,875
Germany
4,224
Korea
1,361
Taiwan
Italy
668
India
654
France
378
3,126
Others
0
5,000
10,000
15,000
20,000
Million dolars
Source: Departamento de Comercio, Estados Unidos.
It is consider, 8708: Parts and accessories for tractors, public-transport passenger vehicles, motor cars, goods transport motor vehicles
and special purpose motor vehicles
18
Market value and investment
opportunity in the supply chain in Mexico
• 71% of total demand for processes is imported, therefore, there are
huge investment opportunities for foreign companies.
• Some of the most demanded processes are stamping, casting,
forging and machining.
PROMEXICO’s calculations.
Data in billions of dollars.
The opportunity
described in the top ten
supply processes for
the automotive industry,
which account for 85%
of the opportunity
identified by ProMéxico.
Source: PROMEXICO. The Auto Parts Industry, Business Intelligence Unit.
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Light vehicles
Domestic yearly sales
Annualized sales
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
Source: AMIA, with member’s data.
Domestic market: similar countries
Vehículos por cada mil habitantes
Argentina
Brasil
México
25
23
20
18
15
10
10
9
9
8
5
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: ACARA, AMIA, ANFAVEA, ANPACT, World Bank, IBGE, INEGI and INDEC.
Main Challenge: Domestic Market
Main reasons explaining the gap between sales and market potential:
• Indiscriminate Import of used vehicles from USA
• Little financing to promote vehicles sales
Imported used vehicles
1,600,000
Used vehicles imported *
1,400,000
1,200,000
1,000,000
800,000
600,000
Δ -16.2%
470,483
596,889
458,114
2007
2008
2009
2010
2011
2012
years
Source: AMIA whit SAT data.
* Consider used vehicle imported on the border, pick ups and general vehicles.
356,123
272,909
2006
424,718
1,031,048
2005
644,209
1,291,845
0
1,575,150
200,000
776,077
400,000
2013 jan-aug jan-aug
2013 2014
Challenges and opportunities ahead
• Mexico will remain as an important world’s export
base, manufacturing highly competitive vehicles.
• Auto parts industry will keep its place as a major
exporter. However, local supply chain still needs
to be strengthen (tier 2 and tier 3).
¡THANK
YOU!
Eduardo J. Solís Sánchez
President
Mexican Automotive Industry Association
(55) 5272-1144
esolis@amia.com.mx