Mexico as a Global Manufacturing Hub, Part 2

By John Paul McDaris

In our last blog post, we examined the distribution of the Mexican automotive export market. But that is only half the picture. Drawing a comparison to the Nielsen television ratings, in order to have an accurate sense of a TV show’s popularity, you need to know not only what shows people were watching, you also need to know the universal number of television viewers.

So it’s important to look back at how much Mexican auto exports have grown over the past decade, as the graphic below illustrates (data courtesy of OISA, an association of OEM manufacturers).

Mexican automotive exports nearly doubled over the past ten years. Doubling again by 2024 would equate to more than 7 million cars exported annually. This is a very important point, as it reinforces the notion that Mexican manufacturing is not just about moving or relocating production from one low-cost part of the world to Mexico, in order to leverage cheaper labor.

As we have pointed out in the past, Mexican manufacturing has shifted from a focus solely on cutting costs to a more expansive view that emphasizes growth prospects. The big OEMs see this and the Tier 1 suppliers providing them with parts do too. Does the rest of the supply chain get it?

Source: OICA

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