1

Mexicos AutoMotive
Sector
May 2007
Prepared by: Office of Representation of Mexicos Secretary of Economy in Japan
Mexico-Japan Economic Partnership Agreement
Embassy of Mexico
Email: comunicatokio@economia.gob.mx, Tel. 3506-6681
2
Mexicos Automotive Sector

Mexicos automotive industry
is one of the countrys most
important sectors in terms of
FDI, exports, and employment

Mexico is one of the top ten
global manufacturers of
vehicles

In 2006, Mexico produced
1,978,771 vehicles

During the first four months of
2007, Mexico produced
597,382 automobiles









0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2003 2004 2005 2006
N
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m
b
e
r

o
f

V
e
h
i
c
l
e
s


Source: Mexican Association of Automotive Industry
(AMIA)
Mexicos annual vehicle production
3
Mexico: Among the Worlds Top Ten Countries in the
Production and Exports of Automobiles










FTA European
Union
CEA Argentina
FTA Chile
FTA
Nicaragua
FTA
Costa Rica
FTA Bolivia
FTA
Colombia
NAFTA
FTA Japan
FTA
Honduras
El Salvador and
Guatemala
FTA Israel
CEA Brazil
FTA Uruguay
Automotive products and finished vehicles produced in Mexico are
exported to more than 30 countries, including Japan, under preferential
market access through Mexicos FTA network
FTA EFTA
4
Mexicos Automobile Exports
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2003 2004 2005 2006
N
u
m
b
e
r

o
f

V
e
h
i
c
l
e
s

Source: Mexican Association of Automotive
Industry (AMIA)


In 2006, Mexico
exported 1,536,768
vehicles, a 29.5%
increase from the
previous year


From January to April
2007, Mexico exported
449,338 vehicles

5
Mexicos Autopart Industry
The autopart industry in Mexico comprises
approximately 350 companies in the Tier 1
category. About two thirds of those
companies are foreign owned

Mexico needs to expand its manufacturing
base in Tier 2 and 3 suppliers. The Mexico-
Japan EPA represents an opportunity to
Japanese autopart companies in Mexicos
growing automotive manufacturing sector
6
Structure of Mexicos Auto Parts Industry
Tier 2
Tier 1
Tier 3
Assemblers
345 companies
(mostly foreign)
14 companies
Source: INA (Mexicos National Industry of Autoparts)
7.0% of Total Manufacturing GDP
8.1% of Total Manufacturing Exports
Total Production: 1.677 Billion Dollars
(Estimated, 2004)
Parts Suppliers
Approx.
1,000 companies
(About 30%
are domestic)
Casting
Components, Press,
Plastic, Aluminum,
Logistics, Bearing,
Machining, Die
Casting & Molding,
Machine Tools
Air Conditioning,
Engine Components,
Steering, Suspension,
Logistics, Die Casting
& Molding, Electronic
Components
7
Strengthening of Mexicos Support Industries
Mexicos Ministry of Economy Fosters the Formation of
Supporting Industries in the Auto Parts Sector
Strengthening
Mexican Small and
Medium Enterprises

Strengthening
Competitiveness
of Japanese Companies
in Mexico
Formation of
Mexico-Japan Supply Chain

Win-Win Business Opportunities
Strategic Alliances between Japanese SMEs and
Mexican companies to become suppliers
8
Mexicos Exports of Autoparts

According to the US
Department of
Commerce, in 2006,
Mexico was the US
largest supplier of
motor vehicle parts

In 2006, Mexican
exports of motor
vehicle parts to the
US totaled 21 billion
dollars, an increase
of 7.4% from a year
earlier
0
5,000
10,000
15,000
20,000
25,000
Mexico Canada Japan
Motor Vehicle parts imported by the US
in 2006
M
i
l
l
i
o
n

U
S
D

Source: US Department of Commerce
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MEXICO TOTAL VEHICLE SALES
2005, 2006 and 2007
PASSENGER VEHICLES 713,379
COMMERCIAL VEHICLES 415,974
2005 1,129,353
PASSENGER VEHICLES 680,942
COMMERCIAL VEHICLES 455,929
2006 1,136,871
Source: Mexican Association of Automobile Dealerships (AMDA)
PASSENGER VEHICLES 166,486
COMMERCIAL VEHICLES 112,141
January-March 2007 278,627
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MEXICO TOTAL VEHICLE SALES, EXPORTS
AND PRODUCTION
2004, 2005, 2006 and 2007
Source: Mexican Automotive Manufacturers Association (AMIA)
SALES Exports Total
Production
Retail Sales Whole Sales
2004 1,095,796 1,096,777 1,094,306 1,507,175
2005 1,131,768 1,128,397 1,186,346 1,606,460
2006

1,139,718 1,160,037 1,536,768 1,978,771
January-April
2007

355,235 349,605 449,338 597,382
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Production of Japanese Car Companies Manufacturing
in Mexico
Honda Nissan Toyota Total*
Total 2006 24,262 408,439 33,209 465,910
2006- 2005 % 3.1 17 n.c. 25
January 2,130 47,120 -- 49,250
February 1,912 40,750 2,332 44,994
March 2,150 42,467 5,226 49,843
April 942 37,301 1,922 40,165
2007 Acum. 7,134 167,638 9,480 184,252
Jan-April
06/07 % - 12.9 30.1 - 18.8 23.8
Source: Mexican Automotive Manufacturers Association (AMIA)
* Automobiles
In 2006, Japanese
car companies were
responsible for 24%
of Mexicos total
production
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Retail Sales of Japanese Car Companies in Mexico
Acura Honda
Mazda
** Mitsubishi Nissan
Subaru
**
Suzuki
** Toyota Total*
Total 2006 1,631 47,471 7,495 16,751 228,315 308 4,413 60,088 366,472
% 2006-
2005 58.3 23.9 n.c. 11.6 -2.8 n.c. n.c. 70.1 0.7
January 174 4,112 1,100 1,478 19,261 44 448 4,357 30,974
February 156 3,596 1,166 1,313 18,026 45 404 4,166 28,872
March 124 4,097 1,356 1,500 18,358 40 401 5,804 31,680
April 124 3,419 1,154 954 14,115 34 329 4,549 24,678
2007 Acum 578 15,224 4,776 5,245 69,760 163 1,528 18,876 166,204
% Jan-April
06/07 37 1.6 168.9 1.4 - 3.2 n.c. 24.3 16.9 3.9
Source: Mexican Automotive Manufacturers Association (AMIA)
* Automobiles ** New entrants in Mexico as a result of the EPA quota system
In 2006
Japanese
automotive
companies sold
366,472 vehicles
in Mexico,
increasing to
32% their
market share in
the Mexican car
market
13
Exports of Japanese Car Companies Established in
Mexico
Honda Nissan Toyota Total*
Total 2006 15,107 208,820 10,111 234,038
% 2006-2005 4.2 33.5 n.c. 29.5
January 1,155 24,734 -- 25,889
February 1,140 24,639 2,332 28,111
March 1,902 27,890 5,226 35,018
April 150 18,294 1,922 20,366
2007 Acum. 4,347 95,557 9,480 109,348
% Jan-April
06/07 - 14.2 67.9 n.c 76.4
Source: Mexican Automotive Manufacturers Association
(AMIA)
* Automobiles

In 2006,
Japanese car
companies
manufacturing in
Mexico accounted
for 15.2% of the
country's
automobile
exports
14
Mexico-Japan Economic Partnership
Agreement

The EPA has also contributed to the establishment
of four new Japanese companies in Mexico that are
now selling vehicles in the domestic market: Mazda,
Isuzu, Subaru and Suzuki . In late 2007, Hino
motors will start commercialization of trucks in
Mexico.

For fiscal year 2007 (April 2, 2007 to March 31,
2008) the EPA has allocated a quota of 56,844
vehicles to be imported to Mexico from Japan.

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Import Quota for Japanese Car Manufacturers
(General Tariff will be eliminated in April 2011)
Company
Unilateral Quota*1 M-J EPA Quota Total*2
2005 2006 2005 2006 2005 2006
Established in Mexico 58,218 65,305 46,599 45,270 104,817 110,575
Nissan 27,218 29,305 23,718 23,029 50,936 52,334
Honda 5,000 9,000 8,900 8,652 13,900 17,652
Toyota 16,000 17,000 6,664 6,487 22,664 23,487
Mitsubishi*3 10,000 10,000 7,317 7,102 17,317 17,102
Newly Entered in Mexico 0 0 8,240 11,315 8,240 11,315
Mazda 0 0 3,340 5,502 340 5,502
Suzuki 0 0 3,000 4,092 3,000 4,092
Isuzu 0 0 1,900 1,221 1,900 1,221
Subaru 0 0 0 500 0 500
Unused Quota 0 0 0 0 0 0
Total 58,218 65,305 54,839 56,585 121,297 121,890
(Unit: vehicles)
*1) Car manufacturers that produce in Mexico are given quotas for units equivalent to 10%
of its annual production
*2) EPA quotas are given for units equivalent to 5% of the total sales in the previous year
*3) Mitsubishi uses quotas allocated to Daimler Chrysler
Source: Mexicos Secretary of Economy