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What was the performance of the auto parts industry in 2010? Mexico's auto parts industry is in a clear recovery mode. The production value for 2010 landmarks a new record for the sector, it reached US$60 billion. This is about 45% more than 2009 and higher than the previous peak reached in 2008 of US$58.3 billion.
Exports also posted a new all-time record at US$36.95 billion. This figure is 42% higher than 2009 and about one billion above the previous record set in 2008.
Employment in the auto parts sector for 2010 increased to 530,000 workers, about 18% higher than the 2009 level, but well below the highest number reached in 2008 of 580,000 industry employees.
Employment is lagging the other indicators because the auto parts industry plants became more efficient.
As a result of the economic crisis they grew accustomed to produce more with less human resources, and productivity increased.
Were there any permanent plant closures as a result of the crisis? There were very few firms shutting down for good. Rather, many companies consolidated their operations to make more efficient use of their manufacturing space.
What is the outlook for Mexico's auto parts industry in 2011? Up to 2008, the sector had traditionally enjoyed an annual average of investment of about US$1.25 billion.
But in 2009 we only had US$832 million, and in 2010 we had a further decline to US$550 million.
It certainly seems that the industry had idle production capacity, thus we had less investment.
For 2011, we expect investment to recover to about US$1.00 billion, as the industry continues to build strength and plant capacities improve in utilization.
In terms of production, for 2011, we expect a 5% increase over 2010, for a still new industry record, along with exports, which may reach US$39 billion or there about.
We hope that employment will be between 555,000 and 560,000 workers by the end of 2011.
Mexico's auto industry has been criticized by analysts because of its dependency on U.S. manufacturers. Do you expect this to change? Yes, there will be diversification in the future.
The Yen is very strong versus the dollar, and Japanese producers are having a hard time maintaining sales in dollars and production costs in Yens.
They need to relocate to a dollar base manufacturing platform. The same situation affects European producers.
These firms need to relocate to North America and the Americans are not as competitive as the package Mexico offers. We have a definite advantage in cost and experience in our human capital, and our free trade agreements make Mexico a natural hub to serve the regional markets.
There will definitely be new players in the industry.
What are some of INA's main activities for 2011? In April 4 - 8 we will be conducting the international congress of the auto industry in Mexico and the ExpoINA.
We want to concentrate this year on things affecting auto parts producers in particular. Issues having to do with commercial practices, infringement of patents and piracy, and security for instance.
Our guests of honor for the event include Mrs. Grace Lieblein, GM president for Mexico and Daniel Mastretta, president of Mastretta Cars, the producer of the first sports car designed and built in Mexico.
On the advocacy front, we will restart monthly meetings of the Automotive Council with the concurrence of the new Minister of the Economy.
We also have the meetings with the House of Representatives to discuss the issues affecting the industry. The main subject this year continues to be how to improve the domestic auto market, which by all indications will continue to be subdue in 2011.
What is the major long term trend to keep in the radar in the auto parts industry in Mexico? The process of consolidation of auto parts producers. The global auto industry continues to pressure the expectations from the supply chain.
The requirements for manufacturing technology and competitiveness increase continually. In the long term, there will be fewer, stronger auto parts suppliers.