H. Yoo
Research expert covering South Korea
Automotive industry in Mexico - statistics & facts
The growth of the global electric vehicle market has led to many opportunities for the Mexican automotive industry, which relies on various established industrial clusters to attract offshoring opportunities. Multinational automotive groups such as BMW and Volkswagen have committed large investments to car production in the Central American country since 2023. However, the shift in presidency in the United States has impacted some of these opportunities: In July 2024, Tesla put a halt to its intentions of investing in a new Gigafactory in Northern Mexico until at least after the presidential election in the United States.
Despite this U-turn in nearshoring opportunities, the country’s passenger car market recorded an estimated revenue of over 32 billion U.S. dollars. Market forecasts project a drop in the market through 2027 linked to various global and national factors, such as monthly inflation. However, demand for new cars remains high in the country: As of September 2024, around 66 percent of consumers intended to purchase a passenger car within the next twelve months.
An industry attractive for international investments
As auto companies expanded internationally, Mexico became the manufacturing home to many of the leading car brands worldwide, such as "the American Big Three" (General Motors, Ford, and Chrysler), along with German Volkswagen, Japanese Nissan, and South Korean Kia. In 2024, the light vehicle production in Mexico was dominated by General Motors, Nissan, and Stellantis. Projections for 2024 forecast that Chevrolet and Nissan together will hold more than 40 percent of the passenger cars revenue. Perhaps unsurprisingly, in a market dominated by international brands, the annual foreign direct investment (FDI) in the automotive industry in Mexico stood above seven billion U.S. dollars in 2023.
A complex light vehicle market
In 2024, the American continent was the main destination of Mexico's light vehicle exports, with the United States importing some 2.8 million vehicles from its southern neighbor. A year earlier, the United States was in the lead as the main country of origin for Mexico's auto imports. This signaled a strong yet co-dependent auto trade partnership.Â
The success of the Mexican automotive industry is also observable through its steadily increasing light vehicle sales, which denote a strong vehicle demand. Like the United States' automotive sector, light trucks such as sport-utility vehicles and pickups were the most popular type on the Mexican market. The industry is also tackling electric mobility: Monthly battery-electric vehicle sales were at their highest in 2024.
Mexico’s well-established industrial clusters contribute to the dynamism of its automotive industry, in particular by attracting investments from neighboring countries and large international automakers. The growth in the electric vehicle sector further contributes to the industry’s positive performance. However, Mexico’s high levels of interdependence with the U.S. automotive industry create uncertainties in how the industry will develop in the following years, especially due to political changes in the United States.
