Mexico rises to the third position among the world’s largest automotive exporters

Last year, Mexican exports grew 22.5% to 158 billion dollars, surpassing those of Japan and the United States, which rose 16.3% and 13%, respectively.

Mexico rose from fourth to third place among the largest automotive exporters from 2022 to 2023, according to data from the World Trade Organization (WTO).

Marginally, Mexico displaced Japan and the United States, while the European Union remained the leader and China climbed from fifth to second place.

The European Union recorded exports of US$831 billion, followed by China (US$170 billion), Mexico (US$158 billion), Japan (US$157 billion) and the United States (US$157 billion).

These amounts include foreign sales of light and heavy vehicles, as well as auto parts and automotive components.

The automotive industry is expected to undergo rapid change in the coming years, including advances in electric and hybrid vehicle production, driverless technology, co-ownership and subscription business models.

Although Mexico was virtually tied with Japan and the United States on this indicator and previously ranked fourth for a decade, its external automotive sales have shown greater dynamism among the five main competitors, with the exception of China by a wide margin.

Comparing 2023 with 2013, Chinese automotive exports grew 270%, an unprecedented speed, while the other main exporters showed the following advances: Mexico (90.4%), the European Union (25.7%), the United States (15.6%) and Japan (3.3 percent).

As part of the new circumstances, some manufacturers and governments have declared commitments to various electric vehicle and zero-emission goals, such as the state of California’s executive order requiring all new passenger cars and trucks sold in the state to be zero-emission vehicles by 2035.

In addition, the UK government has proposed a ban on the sale of gasoline engines in new cars and vans that would take effect from 2030 and a ban on the sale of gasoline hybrid engines in new cars and vans from 2035.

Other major automotive exporters during 2023 were South Korea ($94 billion), Canada ($63 billion), the United Kingdom ($51 billion), Thailand ($32 billion) and Turkey ($30 billion).

Overall, global automotive industry production has been turbulent in recent years due to the impacts of the Covid-19 pandemic, global semiconductor shortages stemming from the health emergency and other related supplies, a strike by the U.S. UAW union, increased geopolitical challenges and the industry’s transition to electric vehicles.

Industry vehicle volumes increased in 2022 and again in 2023 as global shortages of semiconductors and related supplies eased.

Lower production expected

However, auto parts company Visteon Corporation refers that international industry production volumes will foreseeably decline by 1 million units, which equates to approximately 90 million units produced in 2024, a volume below recent industry production levels that peaked in 2017.

Visteon believes that risks related to vehicle affordability, economic uncertainty, potential geopolitical challenges and changes in customer market share create ongoing uncertainties.

In particular, the Mexican economy depends on foreign trade with other economies, especially the United States and other economies such as China and Canada.

Mexico is an emerging market and exhibits significantly greater volatility from time to time compared to developed markets. It is dependent, among other things, on the U.S. economy and any change in the price of or demand for Mexican exports can have an adverse impact on the Mexican economy.

Translated from the original publication: https://www.eleconomista.com.mx/empresas/Mexico-sube-a-la-tercera-posicion-entre-los-mayores-exportadores-automotrices-20240731-0159.html