Low-Cost Auto Parts Production Means Opportunities for Suppliers in Mexico

Commentary by Doug Donahue

This article in Plastics News had some illuminating stats about the growth of the auto parts sector in Mexico:

• Mexico’s auto parts production was valued at $75 billion in 2013, compared to $57.7 billion in 2007, as estimated by Oscar Albin, executive president of the country’s national supply industry association. He projects the value to hit $92 billion by 2019.
• The automotive and auto parts industries invested $13.2 billion in Mexico from 2006 to 2012, or an 8.8% share of total foreign direct investment (FDI) received by Mexico during that time
• Plastic injection molded components are 20% cheaper to make in Mexico than in the US, according to GE Capital Mexico’s managing director, Alfredo Espino
• Engineering costs are 46% cheaper in Mexico than in the US, according to Ford’s purchasing and STA director in Mexico, Leo Torres.

These are the kinds of numbers and signs that should reassure sub-tier auto suppliers who may be considering the transition to Mexican manufacturing. Investment is here; cost savings is here; and sector export growth is here. So for suppliers who still haven’t made the move to Mexican manufacturing the message is clear – opportunity is still here. It isn’t too late.

Source: Plastics News

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