The Mexican auto parts industry in the region of Guanajuato is expecting a 12 percent increase in costs due to the recent measures released by the country, which are expected to “protect” the nation’s steel industry from Chinese imports.
According to National Chamber of Industry in Celaya (Canacintra Celaya), the auto parts industry will be “hurt” in the short term, as a result of the measures announced by both the Mexican economy ministry and Canacero.
The increase in the cost of the manufacturing of auto parts is expected to reach between 10 and 12 percent, it said, adding that about 55 percent of the nation’s auto parts are made using metals.
“By acquiring a more expensive steel, the manufacturing cost of auto parts will increase,” Juan Carlos Solís Molida, president at Canacintra Celaya told local media.
Molida said the imported steel is less expensive and has a better quality when compared to the same product made domestically. The executive said that bringing the steel from the US is cheaper than purchasing it in Mexico, but prices are expected to increase for the imported material, as Mexico is expected to apply a number of AD duties on foreign steel.
“If steel imports have increased that much, it means that at an international level, it is cheaper than in Mexico. This is very clear. Any company that needs steel at its production [lines] would seek a less expensive raw material.”
Molida said Mexican steel producers should know better the quality of the steel that is required for the automotive industry.