Mexico’s automotive industry has become increasingly important in the world. With a total of 3.2 million automobiles in 2014, we occupy the first place in Latin America in terms of production of vehicles, and the seventh place worldwide, according to data provided by the International Organization of Motor Vehicle Manufacturers (OICA).
Mexico is the fourth largest player worldwide, having exported 2.6 million vehicles, and is close to surpassing South Korea’s third place, according to the Mexican Automotive Industry Association (AMIA).
In fact, based on the announced automotive industry investments and the production forecasts for new manufacturing plants, by 2020 Mexico will be the sixth largest global manufacturer, and number two in terms of global exports after Germany.
The USA is currently the principal market for vehicles exported by Mexico; seven out of ten units are destined for that market.
The size of the automotive industry positions it as a strategic sector in the Mexican economy, comprising 10% of the nation’s direct foreign investment in 2014, and representing 4% of GDP, 23% of the manufacturing GDP, and 19% of total Mexican exports.
Additionally, according to official Bank of Mexico information, the automotive industry is the main source of foreign currency in the country. The trade balance of this sector closed 2014 with a surplus of 47.5 billion dollars. This revenue is higher than other items such as oil, tourism and remittances.
Regarding the domestic market, more than 1.1 million vehicles were sold in Mexico in 2014. Around 47% of the domestic market is supplied by local production, while the other half is imported from North America, Mercosur (the South American Common Market formed by Argentina, Brazil, Paraguay and Uruguay), Europe and Asia.
Automotive industry domestic sales have steadily grown since 2009. However, the industry has barely reached the level of sales prior to the 2008 crisis. That is why the development of the domestic market remains one of the principal challenges of the industry.
General Motors in Mexico
In 2015 General Motors celebrates its 80th anniversary in Mexico, having arrived in 1935. The current operations of General Motors de Mexico also include the regions of Central America and the Caribbean.
With central offices in Mexico City, GM operates four manufacturing complexes in the states of Mexico (Toluca), Coahuila (Ramos Arizpe), Guanajuato (Silao) and San Luis Potosí (SLP). These complexes consist of 14 manufacturing plants devoted to assembling vehicles, building motors and transmissions, metal casting and stamping.
In the states where General Motors has manufacturing operations, it represents an average 8.1% of their GDP, 15% of their direct foreign investment, 21% of their exports and 4.4% of their total employment, including direct and indirect jobs.
Additionally, General Motors de Mexico has a post-sale center in Toluca and a regional engineering center (TREC), where over 800 specialized engineers work in developing interior and electrical components, as well as thermal systems that support the production of vehicles in North America, China and Europe.
Altogether, General Motors generates around 15,000 direct jobs and more than 105,000 indirect jobs. Also, women represent 19% of total jobs.
In 2014, General Motors represented 21% of the total nationwide production of vehicles, with 678,000 manufactured units, a 5% increase in respect to 2013.
This company is the number one exporter of vehicles in Mexico, accounting for 21% of national automobile exports, with a total of 553,500 units sold in foreign markets during 2014, a 5.3% growth compared to 2013.
In 2014 the value of General Motors purchases from locally established suppliers reached 14 billion dollars, a new record after eight decades operating in Mexico. This figure represents a 16% increase compared to the almost 12 billion dollars that the company purchased from Mexican suppliers in 2013, and 16.4% of total global purchases.
General Motors has over 550 Tier 1 suppliers in Mexico, that send over 500 million components annually to our manufacturing centers in Mexico, while around 600 million components are distributed to the rest of the world.
In Mexico, General Motors markets four brands: Chevrolet (our most traditional brand with the highest volume of sales), Buick (our premium automobile and crossover brand), GMC (a brand specializing in SUVs, pickups and crossovers, built under the Professional Grade philosophy), and Cadillac (our luxury brand which represents the fusion of art and science).
The company has an experienced network of distributors spread throughout the country, which sold around 217,000 vehicles of GM brands in 2014. Our brand penetration has positioned one of our vehicles manufactured in San Luis Potosí—the Chevrolet Aveo—as the top seller in the Mexican market for three consecutive years.
General Motors is also a leader in seven market segments: economy (Spark), compact cars (Aveo), sports vehicles (Camaro), small SUVs (Trax), large pickups (Silverado 2500), large SUVs (Suburban), and large luxury SUVs (Escalade).
Last December, at the Los Pinos Presidential Residence, General Motors announced investments for a total of 5 billion dollars in Mexico for the 2013-2018 period. These investments will be primarily for modernizing and expanding manufacturing plants in Ramos Arizpe, San Luis Potosí, Silao and Toluca.
With the right economic conditions, these investments will translate into 5,600 new direct jobs, which will also create around 40,000 new jobs in other related industries.