NEWS

Automotive Sector tested again.

Tuesday, February 16, 2021

Year after year the automotive industry in Mexico serves as a pillar of the national economy; Therefore, it is not surprising that foreign direct investment is towards this industry.

Unfortunately, The COVID-19 pandemic did not spare the automotive industry; causing historical drops month after month during 2020.

Global drop in the sector

Global drop in the sector

 

Mexico's drop in the sector

Mexico’s drop in the sector

 

Along with production, demand for vehicles and auto parts fell to historic levels worldwide; thus affecting the jobs and production of factories that produce vehicles, auto parts and components in the sector.

Plant capacity used, by country

Plant capacity used, by country

 

Will a recovery be possible in 2021?While the national economy will grow in 2021; mainly due to the automobile sector, this growth will not be enough to reach the growth levels in previous years.

It is expected that the automotive industry in Mexico in 2021 will grow between 12% and 24% from the production and export of light vehicles, to the manufacture of auto parts and components; the foregoing derived from the good forecasts and the good commercial relationship with North American neighbors.
Currently, there are projects in the sector that will help the recovery of the industry, such is the case of vehicle imports by the Mitsubishi firm, it is expected that by 2021 automotive operations will increase, thus favoring the increase in trade operations abroad in the Mexican ports, where said Mitsubishi project will be developed in the port of Lázaro Cárdenas.
Regarding foreign direct investment, the collapse was historic in 2020 and it is expected that we will not reach the previous levels since the industry is evolving and with it the change of interest in investment that entrepreneurs have worldwide.
Figures from January to September of each year

Figures from January to September of each year

Despite this, experts assure that the current investment in the sector will cause the reinvestment of companies to be in our country.

The evolution in the automotive sector will generate investment in new technologies aimed at a world with lower emission of pollutants and efficient use of energy, so that atsome point they will have to add technology for electric and hybrid cars to production in Mexico; Such investments, in the medium and long term, will directly benefit the country’s economy.

In this regard Gunter Daut, commercial vice president of Bosch inMexico, commented: “The automotive industry is in a phase of transformation from current technology, what are gasoline or diesel cars, to the technology of the future, which are hybrid cars and electricity, and the expansion of Bosch like any other plant here in Mexico depends on our market at this moment we can see that the electrification markets are growing ”.
Likewise, Luis Lozano, president of Toyota Mexico, affirmed that: “the assemblers established in Mexico, at some not too distant moment, will have to seek the implementation of new ecological technologies.”
In the future, the forecast and outlook for the sector is encouraging in the medium and long term; it will reach the levels of previous years and even to have higher levels of operations and economic spillover in the country.