Mexico

On May 8, it was announced that Mexico withdrew the tariffs on aluminum and its alloys that had been stipulated on April 22, 2024, that corresponded to 35% and 20%, respectively.

This change was published in the Official Gazette of the Federation (DOF), where it is mentioned that the reason for the change is due to the fact that “there is currently no national production of primary raw aluminum (unalloyed and alloyed), and the availability of said merchandise in countries with which Mexico has concluded an international treaty on trade matters is insufficient to satisfy the supply of the automotive, auto parts, and electronics industries, among others.”

Sections 7601.10.02 and 7601.20.02of the decree of April 22 are deleted to prevent the industries' supply chain from being affected.

The changes presented in the decree come into force as of May 9, 2024, one day after its publication in the DOF.

(Diario Oficial de la Federación on May 8, 2024)

On May 6, it was announced that Gerdau, the Brazilian steel company is considering the possibility of setting up a plant in Mexico, mainly to supply the automotive sector.

The potential plant includes the construction of a steel mill capable of producing 600,000 tons of special steels annually. If the project is approved, construction will begin during 2025 with an approximate investment of USD 500 to 600 million, although a location has not yet been specified.

This analysis by the company is partly driven by nearshoring and favorable forecasts for the local automotive industry, as well as the concentration of important companies in the sector, many of which are customers of Gerdau.

(Cluster industrial on May 6, 2024)

OEMs with manufacturing operations in Mexico exported 289,756 light vehicles in April 2024, a 14.4% increase compared to the 253,335 units shipped in April 2023, according to the National Institute of Statistics and Geography (INEGI).

OEMs with increased exports in April included VW with a 97.5% increase to 34,390 units; Mercedes Benz with a 69.9% increase to 7,657 units; Kia with a 29.2% increase to 17,319 units; GM with a 27.2% increase to 70,283 units; BMW Group with a 24.5% increase to 8,152 units; Honda with a 21.7% increase to 15,421 units; Nissan with a 20.3% increase to 30,289 units; Ford with a 17.3% increase to 31,594 units; Mazda with a 13.5% increase to 13,376 units; and Audi with a 2.0% increase to 12,918 units.

OEMs with export declines in April included Chrysler with a 40.9% decrease to 26,011 units and Toyota with a 2.8% decrease to 22,346 units.

Among export destinations for the first four months of 2024, Mexican exports were up 16.4% from the same period in 2024 to 901,914 units sent to the U.S, up 11.4% to 81,909 units to Canada, and down 32.9% to 33,540 units being exported to Germany.

(INEGI press release on May 7, 2024)