mexico’s auto industry - center for automotive research · automotive industry top 20 u.s....
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MEXICO’S AUTO INDUSTRY 23 YEARS SINCE NAFTA AND BEYOND
July 2017
NAFTA Trilateral Trade has tripled
Source: SE with import data from Statistics Canada, Banxico, and USDOC.
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200
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800
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1200
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
1,122
1,033997
Mexico-Canada Trade U.S.-Canada Trade Mexico-U.S. Trade
289
699626
602661
568506476
419376
338
893846
772
942
699
880
1,010
615
1,059
NAFTA
1,075
Trilateral Trade between the NAFTA PartnersIn billion dollars
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Mexico and Canada are strategic
production par tners for U.S.
When Mexico and Canada export, the United States exports.
Mexico Canada Malaysia South Korea China Japan
40%
25%
8%5% 4.0%
2%
Source: NBER, Global Value database in Koopman, Powers, Wang, Wei (September 2010, revised March 2011)
MEXICO
NAFTA partners do not simply trade goods; we work together to manufacture them.
U.S. value added in final goods exports of selected countries to the U.S.
U.S. exports also benefit from Mexico’s network of free trade agreements with 46 countries, providing preferential market access to 70% of world GDP and two-thirds of global imports.
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NAFTA “Team-WORKS”
Mexico
United States
NAFTA vehicles production:
18.1 million in 2016
NAFTA vehicles exports:
$173 billion in 2016
Source: SE with data from IMF, WTO, and OICA.
Canada
EU 28, 50%
Other, 9%
Japan-South Korea-China,
19%
NAFTA, 22%
Motor Vehicles Global Exports Share (in value)
2.3
12.2
3.6
China, 28.1
EU 28, 21.7
NAFTA, 18.1
Japan, 9.2 Other, 17.9
Motor Vehicles Global Production (in million units)
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NAFTA drives U.S. production
of motor vehicles
• U.S. auto vehicles production increased by 6.48 million units from 2009 to 2016. This growth accounted for:
69% of NAFTA’s growth in
production
20% of the world’s growth in
production.
• NAFTA region accounted for 28%of the world’s production increase.
Source: SE with data from OICA.
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Wo
rld
pro
du
ctio
n (
Mill
ion
s)
NA
FTA
pro
du
ctio
n (
Mill
ion
s)
Motor vehicle production 2009-2016 (millions of units)
3.6
2.3
12.2
94.9
18.1
61.7
8.7
5.7
1.5 1.5
World
NAFTA
USA
Mexico Canada
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U.S. exports to Mexico:
$19.8 billion in auto parts
$4.0 billion in vehicles
Auto Industr y Integration
NAFTA boosts coproduction between U.S. and Mexico in the auto industry.
Vehicles made in Mexico have a high US content, while at the same time vehicles manufactured in the US use a large number of Mexican-made auto parts, considering those globally competitive vehicles as “Made in North America”.
Inputs and auto parts cross the US-Mexico border several times for further processing.
Source: Wisertrade, using NAICS, and OICA
Mexico’s exports to U.S.:
$46.0 billion in auto parts
$49.3 billion in vehicles
1stMexico is the US’ largest auto parts provider
1st
The US is Mexico’s largest auto parts
provider
Win-win 21st Century supply chain
$3,800 in Mexican parts per car
produced in the US$5,500 in US parts per car produced in
Mexico
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Economic integration promotes
a vir tuous circle of regional growth
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140
2008 2009 2010 2011 2012 2013 2014 2015 2016
GD
P A
uto
Ind
ust
ry (
bill
ion
)
Mo
tor
veh
icle
s ex
po
rts
and
au
to p
arts
imp
ort
s (b
illio
n)
U.S. auto industry GDP, U.S. motor vehicle exports and U.S. auto parts imports from Mexico ($ billion)
62.7
46.0
38.1
15.4
715
320
U.S. Auto Industry GDP
U.S. motor vehicles total exports
U.S. auto parts imports from Mexico
• The U.S. auto industry GDP has
grown 124% since 2009.
• U.S. auto vehicles exports have
grown 65% since 2009.
• Mexican auto parts are key for U.S. auto industry competitiveness.
U.S. imports of Mexican auto parts grew by 198%.
This growth was driven mainly by an increase in the U.S. auto industry GDP and market share gains in the U.S. auto parts import market.
Source: Wisertrade and Bureau of Economic Analysis 6
Strong and growing ties in the
automotive industr y
Top 20 U.S. – Mexico trading states in automotive industry($ Million)
Automotive Exports 2016Automotive Imports 2016
Source: WiserTrade, using NAICS
Mexico is:
• The TOP export market of motor vehicles and auto parts for 8 states: Texas, California, Arizona, Utah, New Mexico, Rhode Island, Connecticut, and Alaska
• The 2nd largest export market of motor vehicles and auto parts for 26 states.
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U.S. Auto Industr y employment
has reached pre -crisis levels
Source: Bureau of Labor Statistics, Scotiabank Global Auto Report April2017, and CAR NAFTA Briefing: Trade benefits to the automotive industry and potential consequences of withdrawal from the agreement.
June 17:
939.3
July ‘16:
951.5
June ‘09:
623.3
Jan ‘08:
951.5
All employees, motor vehicles and parts (thousands)
• U.S. auto industry employment has increased by nearly 6% annually during the current economic expansion:
more than five times the growth in overall manufacturing employment, and
triple the pace of total employment gains in the United States during this period.
• At least 31,000 U.S. jobs could be lost as a result of a 35 percent tariff on light vehicles and parts imports from Mexico.
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Mexico is the:• 7th largest producer of vehicles
• 4th top exporter of vehicles globally
Production reached 1.9 million units in the first half of 2017:
• 1.5 million of these were exported.
One in five cars built in the NAFTA zone comes from Mexico
• Pickups such as some versions of Fiat Chrysler’s Ram and Chevrolet Silverado, two of the best-selling vehicles in America, are built in Mexico.
Mexico’s Auto Industr y:
Rising as a World Leader
2.32.6
2.9 2.93.2
3.43.6
1.9
2010 2011 2012 2013 2014 2015 2016 2017/H1
12.8%1.7% 9.8%
13.2%
5.6%2%
Source: AMIA, Wall Street Journal
Total Production(million units)
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Mexico’s strategic location and its network of free trade agreements with 46 countries fosters the country as a competitive export platform for the automotive industry.
80% of Mexico’s vehicle production had foreign markets as its final destination.
Strategic Expor t Platform
Source: AMIA, units in thousands
In 2016, Mexico exported 2.7 million vehicles
USA 2,133
Canada 246
Brazil 46
Argentina 39Chile 19
Colombia 50
Europe 116
ASIA 28
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NAFTA has been instrumental in
Mexico’s growing auto expor ts
Source: Secretaría de Economía, AMIA. Export figure includes 8702, 8703, and 8704 HS code.
Last year, the Mexican auto industry exported $55 billion in motor vehicles, accounting for 15% of Mexico’s total exports.
Since NAFTA, automotive exports have multiplied by 11, growing 11% per year in average.
In 2016, the largest exporting producers were:
• GENERAL MOTORS 540K units
• NISSAN 500K units
• FIAT-CHRYSLER 443K units
• FORD MOTOR 377K units
• VOLKSWAGEN 334K units
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Mexico's Motor Vehicles Exports($ billion)
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NAFTA 2.0
NAFTA modernization should rely on:
Liberalization Goods Services Investment
Economic integration Supply chains Energy Talent
Competitiveness Innovation Trade facilitation Regulatory cooperation Border efficiency
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NAFTA 2.0
A NAFTA 2.0 should be based on three basic elements:
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The Auto Industr y as an Engine
The North American auto industry is benefiting from
over two decades of trade liberalization and economic
modernization under NAFTA, becoming a powerful
engine for economic growth not only for Mexico’s
economy but also for the region.
We produce together.
T H A N K Y O U
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Francisco Sandoval-SaquiTrade and NAFTA Office
SECRETARIA DE ECONOMIAMEXICO
[email protected] Trade
www.naftamexico.net More information: [email protected]
(202) 728-1705Washington, DC
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