The Automotive Cluster of Nuevo Leon (Claut) asked Mexican steelmakers last week to not pass the costs of the steel coil tariffs imposed by the federal government onto customers of their products.
Representatives from the consulting firm IHS Automotive and the National Autoparts Industry (INA) said it will be difficult to absorb the costs through productivity of the auto industry, complicating the operation of both sectors.
"We will go to the Ministry of Economy to explains to us the reason for this measure and to see what other countries can bring, since neither Ternium nor other steelmakers in Mexico have the capacity to supply steel for the 3.3 million vehicles produced annually by the Mexican auto industry," the INA said.
Rodrigo Alpizar, president of the National Chamber of Industry (CANACINTRA) agreed, telling media that “the measures adopted for steel should also be extended to end products to avoid market distortion.”
Mexican steel producers also weighed in on the new tariffs.
“It is positive that authorities are taking action against unfair competition from foreign steel, but the damage is done and it can not immediately reverse,” said AHMSA spokesman Francisco Orduña.
He stressed that as market conditions improve and the company is “back to normal rhythm”, AHMSA will reassess its adjustment plan, which included cutting employee numbers by nearly 4,500.
Juan Antonio Reboulen, director of Institutional Relations and International Trade of DeAcero, contextualized the effect of the tariffs, noting the recent arrival of several automakers to the Bajio region which has not increased the prosperity of the the domestic steel industry because the manufacturers bring with them their existing chain of procurement, including imports.
“Very few assemblers are actually buying steel locally,” said Reboulen, also noting that many Mexican steel producers do not yet produce the “ultralight” steel now used so frequently in new car models. “There are some plants that are starting (to innovate), but not to the extent that Mexico’s auto industry requires,” he said.
The innovations can’t come soon enough—Reboulen noted that DeAcero has undergone a 22 percent reduction in staff since 2013, due to the surge in imports.