Mexico: Audi, BMW, Nissan/Daimler, and Kia race to build new plants

Record 1.86 million light vehicles produced in first seven months of 2014



Mexican light vehicle production and exports
Why Mexico is appealing as production and export hub

 A favorable geographic location, low labor costs, and free trade agreements with 45 nations and regions make Mexico advantageous to become a production and export hub of automobiles.

Production and exports hit record highs both for 2013 and January-July period of 2014

 Based on AMIA's data, Mexican light vehicle production and exports increased to 2.93 million units and 2.42 million units, respectively, in 2013, both hitting record highs. For the January-July period of 2014, production and exports also reached their record performances for the period.

 According to LMC Automotive's latest forecast (in July 2014), 2014 Mexican production will rise to 3.17 million units. LMCA forecasts that Mexican production is expected to grow further over next three years and will climb to 4.17 million units in 2017.

OEMs rushing to build new plants

 Following Nissan, Honda and Mazda, Audi is scheduled to start operations of a new plant in 2016. Nissan and Daimler will produce premium compact vehicles at a new joint venture facility from 2017. BMW will build its first plant in Mexico and start production in 2019. South Korea's Kia Motors has also announced a plan to build a new plant.

Sales top one million units in 2013 and rise slightly for January-July period of 2014

 Mexican light vehicle sales in 2013 grew 7.7% year-on-year (y/y) to 1.06 million units, marking the highest since 2007. Nevertheless, sales for the January-July period of 2014 increased only slightly to 600,000 units, up 1.3% y/y.

Related Reports:
U.S. Market: Sales recovering to pre-financial crisis levels (Aug. 2014)
Japanese suppliers in Latin America (part 1): New plants in Mexico (Mar. 2014)
Japanese suppliers in Latin America (Part 2): Trends in Brazil and Mexico (Mar. 2014)