In 2022, the North American country was among the largest motor vehicle producers in the world and the leader in the Latin American region. The country’s automobile production value recovered from the economic impact of the COVID-19 pandemic in 2021, and its light vehicle output is expected to increase, reaching pre-pandemic levels in 2024.
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 2022, the light vehicle production in Mexico was dominated by General Motors, Chrysler, and Nissan. Projections for 2023 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 4.4 billion U.S. dollars in recent years.While the Mexican automotive market remained attractive for foreign investors, investments decreased in 2021 and 2022 due to the impact of the COVID-19 pandemic and semiconductor shortage on the global automotive industry. In 2022, the light vehicle and truck assembly segment was the only sector to record a rise in FDIs, while auto part production investments shrunk by around 52.6 percent. Despite the sizeable multinational participation, this industry has significantly driven the local economy, generating about 102,500 jobs in the vehicle manufacturing sector alone in 2021. This was over 2019 employment figures, highlighting the sector's recovery in the aftermath of the health crisis.
A complex light vehicle market
In 2022, the American continent was the main destination of Mexico's light vehicle exports, with the United States importing some 2.25 million vehicles from its Southern neighbor. That same year, the United States was in the lead as the main country of origin for Mexico's auto imports, dwarfing all other countries. This signaled a strong yet co-dependent auto trade partnership. Despite the continual increase in imports reported up to 2019, Mexico's automotive industry has maintained a positive trade balance throughout the past decade. 2022 was the strongest year for Mexican automotive exports recorded between 2009 and 2022, as the country's automotive industry exported goods worth, in total, nearly 136.1 billion U.S. dollars. The success of the Mexican automotive industry is also observable through its steadily increasing light vehicle sales, which denote a strong vehicle demand despite the fact sales have yet to reach their pre-pandemic levels. 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. Though most of Mexico's electric vehicle sales in 2022 were non-rechargeable hybrid vehicles, monthly battery-electric vehicle sales have grown throughout 2022 and 2023. In May 2023, the country's government drafted the National Strategy for Electric Mobility (ENME), intending to make half of Mexico's new light vehicle sales be zero-emissions vehicles by 2030.
