Automotive Industry in Mexico Fueled By the Arrival of Auto Parts Manufacturers to Supply Mazda, Honda and Nissan

Auto parts manufacturers will invest USD20 million in central Mexico, in a region known as "El Bajío". Most of these automotive manufacturers are based in Japan and will start establishing this year in Mexico to supply Honda, Mazda and Nissan.

The National Auto part Industry (INA) predicts that in 2013, after the three plants begin operations, the auto parts production will grow from between 15% to 20% and reach a total value of $83 billion dollars production value.

Oscar Albin, President of INA, said that this is expected to generate 15,000 new jobs in the sector within 12 to 18 months. With this number of jobs created, Mexico would have recovered and surpassed the employment level we had prior to the economic crisis. As far as expectations for auto parts industry in 2012 is concerned, Mr. Albin said that growth is expected to be 8% over the US$65 thousand produced in 2011.

The interest of auto parts manufacturers in becoming suppliers for the New Mexican assembly plants is so great that the Japan External Trade Organization (JETRO) has received 120 applications from companies seeking supply agreements with Honda, Mazda or Nissan.

"The arrival of suppliers in the country is due to the strategy employed by assembly plants, which entails buying more components in Mexico to save on logistics and exchange costs." States Mr. Albin.

Mexico is the leading supplier of auto parts for the US market, with 90% of local production, 4% goes to Canada and the rest to, Brazil, Germany, Japan, China, Australia and Colombia, among others.