Mexico attracts leading global auto parts makers

MEXICONOW Staff Interview

Light vehicle production in Mexico will rise from just over 3,000,000 in 2014 to almost 5,000,000 by 2020 as the country’s auto industry scales new heights.
That was said by Oscar Albin, Executive President of the Mexican Association of Automotive Parts Manufacturers (INA), as he spoke on the auto parts industry in Mexico to MEXICONOW.
His prediction was based on INA’s program vision which, he said, is integrated by two main axes – to reach a domestic market size of new vehicles that promotes new investments in the sector and to turn Mexico into one of the world’s top three destinations for design and vehicle manufacturing, as well as auto parts and components.
“And let us not forget that Mexico was the sixth largest producer of auto parts in the world, behind only China, Japan, USA, Germany and South Korea, with a production value of US$76.8 billion and it is the fifth largest exporter/importer of auto parts on a global level, behind only Germany, USA, China and Japan.
“We at INA intend to make the auto industry in Mexico even better and to that end we have outlined a strategic program for the auto industry based on four pillars – the strengthening of the domestic market, improving the business environment for the auto industry, accessing foreign markets and enlarging research, development and innovation.”
To strengthen the domestic market, he said the imports of used vehicles would have to be regulated, the total in-country vehicle population would have to be modernized and the target of new vehicle sales would have to be reached.
To regulate the imports of used vehicles, INA would recommend applying emission norms to imported used vehicles, apply physical and mechanical conditions tests for such vehicles and strengthen legal regulations on them.
To modernize the total in-country vehicle fleet, INA was promoting a light vehicle scrapping program to remove 100,000 vehicles per year and to achieve the target of new vehicle sales, the organization would promote legal changes to facilitate collateral enforcement by banks and lenders in case of defaulting on leases or credit.
Mr. Albin described the second pillar of the program, to improve the business environment for the auto industry as being broken down into three parts. “These are the development of national suppliers, the assurance of human resources in terms of quality and quantity and the promotion of competitive incentives for investment.”

“Then we go on to the third pillar of access to foreign markets. The requirements to do so can be defined as market diversification and maintaining, defending, reviewing and improving existing trade agreements.”
“The fourth and final pillar, research, technology, development and innovation, can also be broken down into three parts: The improvement of human resources, strengthening and improving technological infrastructure and developing incentives to technology projects.”
Mr. Albin showed tables that explained the main auto parts exported by Mexico.
Leading the way were harnesses followed by seats for vehicles and their parts, and airbags. The main auto parts included wires and cables of copper, aluminum and other alloys followed by engines for vehicles with a cylinder capacity between 1,000 cubic centimeters.
He commented: “The location in Mexico of the most important auto parts manufacturers from around the world strengthens the Mexican production chain. It is interesting to note the origin of the auto parts manufacturers located in Mexico: A total of 29 per cent is from the USA, 27 per cent from Japan, 19 per cent from Germany, 18 per cent from France, and 8 per cent from South Korea and other places. It says a lot for the Mexico auto parts sector that they chose to have a presence here.”
Mr. Albin concluded: “INA is the most important organization representing companies in the automotive parts sector with manufacturing interests in Mexico. We support the growth and sustainable development of its members through the promotion of the global market and manufacturing of automotive and auto parts industry in Mexico.”
“Our goal is to lean on the importance of the sector and the companies that comprise it, to achieve the best representation with government authorities, with special emphasis on the Federal Government, the automotive sector, academia and society in order to promote growth and development of the auto parts industry in Mexico."