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Mexico will displace Japan in auto parts production
America Economia | December 30, 2022 |

The disruption of global production chains after the pandemic, the increase in regional content marked by the T-MEC and the nearshoring boom will lead Mexico to position itself as the third largest producer of auto parts in the world, surpassing in the coming years Japan, said Francisco González, president of the National Auto Parts Industry (INA).

Starting in 2020, Japanese automotive companies were affected by the closure of manufacturing in Asia and the increase in logistics costs, so now, businessmen from that nation have accelerated their transfer of suppliers to the North American region to create a supplier base, located mainly in the Bajio of Mexico.

Check here: Speculative industrial construction is reactivated in Tijuana due to almost zero vacancy rates

The production of auto parts in Mexico will reach more than US$ 106,600 million dollars at the end of 2022, which would represent an increase of 12.65% compared to what was observed in 2021. Meanwhile, the trend in Japan has been downward, as well as Germany and South Korea, other countries that supply the Mexican and US markets.

The route of the future for the automotive and auto parts industry allows this transformation that we are experiencing, opens up the possibility of reaching positions of greater leadership in mobility. That is an ambitious goal, but it is achievable”, he commented in an interview.

The president of the INA recognized that Mexico is still far from the figures maintained by Japan, which in 2021 had a turnover of US$ 172,000 million, but with the business strategy that they have adopted to locate suppliers of vehicle parts and components that can serve 

For plants that operate in Mexico, the United States and Canada, the gap will be reduced.

Recently, Jorge Vallejo, president of Mitsubishi Motors México, pointed out that as a result of the disruptions in the supply chains experienced since 2020, the need to locate Japanese suppliers in Mexico has become visible.

It establishes a supplier base that can supply spare parts and accessories to the Mexican market, as well as to Latin America. In addition to parts that are directed to North America.

Francisco González commented that the companies that are "landing" in Mexico are focused on electromobility, the development of software and fluids, as well as new components to connect the battery of electric cars.

Of interest: Gross absorption growth of the Bajio exceeds the northern markets during 2022

The Jetro agency of Japan, which promotes international trade, reported that it promotes the link and knowledge about potential Mexican auto parts suppliers towards Japanese companies established in Mexico or those established in the United States or Japan, through the diagnosis of potential Mexican suppliers. and its subsequent dissemination in a database with exclusive access to buyers of Japanese companies.

"The objective is to promote the competitiveness of Japanese companies in the automotive sector located in Mexico, through the development of Mexican suppliers", for which they defined products to be strengthened such as harnesses, rubbers, machining, textiles, forging, springs, molds and dies, among others.

“The T-MEC is impressive, now we need 75% regional content and many have to come to produce here. With world conflicts, the world is regionalized and makes them come to produce more here. The most important factor is the Mexican talent, quality and productivity in the automotive sector”, asserted the president of the INA.

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