Production of auto parts in Mexico could grow 2.2 percent in 2023 to $109 billion

Tuesday, 07 March 2023 22:28:33 (GMT+3)   |   San Diego
       

Mexico’s National Auto Parts Industry (INA), the fourth largest in the world, estimated for 2023 a record year in employed workers and in production value with $109 billion dollars, the business chamber said in a statement.

The value of auto parts production in 2022 was $106.6 billion and with the forecast of $109 billion, the annualized increase is 2.2 percent. In addition, it forecast that at the end of the year, the auto parts industry will employ 891,000 workers, 1.0 percent more than in 2022.

The INA forecasts could be conservative. According to the main headline of the financial section of the Reforma newspaper, citing the Undersecretary of Foreign Relations (SRE), Martha Delgado, the auto parts industry could multiply more than 5.0 times.

"There are indicators that show that more or less an installation like this (like the one that Tesla will do in Mexico) detonates about 450 percent of the supply," said Delgado. In addition, the SRE estimate, the installation of the Tesla plant in Nuevo will generate between 6,000 and 10,000 direct jobs and new indirect jobs would be almost 40,000 jobs.

With more than 900 companies affiliated to the INA, Mexico is the fourth largest supplier of auto parts in the world, only surpassed by Japan, the United States and China. In 2021, Mexico ousted Germany from fourth position, the business chamber reported.

According to Delgado, from the SRE, in the states of Nuevo Leon, Chihuahua, Coahuila, San Luis Potosi, Aguascalientes and the State of Mexico there are 127 auto parts suppliers for the Tesla plant in Austin, Texas. Separately, the INA reported that auto parts manufactured in Mexico contribute 20 percent of the value of Tesla vehicles.

On March 1, Elon Musk, CEO of Tesla, announced that he will invest $5.0 billion in a new plant in Nuevo Leon, Mexico for the production of electric vehicles.


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