Production by German automakers in Mexico increased 46% in 2017
Matthias Wissmann, President of the German Association of the Automotive Industry (VDA), revealed that last year German automakers increased their production in Mexico by 46% with the opening of the Audi assembly plant in Puebla.
During a press conference at the North American International Auto Show (NAIAS) in Detroit, Wissmann said that sales by German automakers in the U.S. grew 1% to 1.35 million new vehicles. The overall U.S. market, by contrast, lost nearly 2%, down to just over 17.1 million light vehicles. Market share by German original equipment manufacturers (OEMs) went to 7.9% from 7.6% in 2016.
In 2017, the German manufacturers in NAFTA built over 1.4 million light vehicles, a record figure that represents a 11% increase compared to the previous year. Of those vehicles, 56% were built in U.S. plants, meanwhile 44 % rolled off production lines in Mexico, where production totaled almost 620,000 units, with 461,248 coming from the Volkswagen facility and 158,550 from the Audi plant.
Volkswagen and Audi are the only two German automakers with manufacturing plants in Mexico, both in Puebla specifically. Mercedes-Benz is expected to join the Mexican automotive hub by the end of year with a joint facility built in Aguascalientes in cooperation with Nissan’s premium brand Infiniti. Also, BMW is scheduled to begin production in 2019 at assembly plant currently under construction in San Luis Potosi.
Wissmann said that U.S. production by German OEMs totaled 803,000 light vehicles in 2017, down 6%. Overall U.S. production also fell 8% to 11 million units in 2017.
The official underscored the importance of German auto makers in the U.S. exports, citing that 40% of vehicles built in the U.S. by German manufacturers are sold in the U.S., another 6% go to buyers in the other two NAFTA countries, while the rest 54% (around 430,000 units) are exported to Europe, Asia and the rest of the world.
“Our share of all U.S. exports (of light vehicles) therefore amounts to roughly one quarter, three times as much as our share of the U.S. market,” Wissmann added.
In the opposite direction, Wissmann noted that the U.S. still comes second among the top five export destinations for vehicles produced in Germany. In 2017, about 500,000 light vehicles from Germany were exported to the United States. In terms of value, the U.S. is actually the number one destination for passenger cars, light trucks and supply products from Germany.
However, as the German automakers have been strategically expanding their production in the U.S. for several years, exports from Germany have been decreasing. The reduction over the last four years (2013 to 2017) comes to one quarter, around 160,000 light vehicles.
German OEMs employ over 36,000 people in the U.S. There are another 80,000 employees at German auto suppliers. This high level of employment comes about because the suppliers’ customers are not only the German OEMs, but also other manufacturers that produce in the U.S. or in NAFTA.
Since the end of the 1990s, the German suppliers have trebled the number of their plants in NAFTA to over 430, and in the U.S. alone the number of facilities has risen from nearly 90 to around 270.