Summary: The Mexican auto aftermarket is estimated to be more than US$4 billion in 2016 and is expected to grow at a rate of between 5% and 6% over the next few years. There are approximately 30 million vehicles in operation (VIO) in Mexico, making it the 11th largest national fleet in the world. The Mexican auto #aftermarket is estimated to be more than US$4 billion in 2016 and is expected to grow at 5% to 6% over the next few years. Click To TweetThe Mexican automobile industry is expected to manufacture 5 million light vehicles for 13 makes, in over 30 automobile factories, by 2020.
The Mexican automotive aftermarket and the economy
The aftermarket industry is one of the Mexican economy’s largest segments, generating 3% of Mexico’s annual GDP, 17% of its manufacturing GDP (with half of that from auto parts), and a third of Mexico’s total exports. All world-wide OEMs have a presence in Mexico and 70% of all vehicles manufactured in Mexico are exported to the US and Canada.
According to the International Organization of Motor Vehicle Manufacturers (OICA), Mexico was the 10th largest producer of motor vehicles in the world in 2009. That grew to seventh place in 2016, putting Mexico behind China, the US, Japan, Germany, India and South Korea.
According to the OICA, in 2016, Mexico manufactured 1.9 million cars and 1.6 million commercial vehicles for a total of 3.6 million vehicles. Of those, 2.7 million were exported. Pro México, a division of the Mexican Ministry of Economy, ranks Mexico’s light vehicle exports as fourth largest in the world.
Pro México lists 2,500 manufacturers of auto parts located in 19 of Mexico’s states, producing over US$81 billion in parts (2014); US$42 billion in parts are imported. US$65 billion in auto parts are exported, primarily to the US, followed by Canada, Brazil and China. The auto parts industry has been growing at a rate of 7% per year between 2008 and 2014.
Growth of the automotive industry in Mexico
Mexico has become the fifth largest producer and sixth largest exporter of auto parts in the world, and the largest supplier of automotive parts to the US. Much of that success is attributed to Mexico’s geographic location as well as international trade agreements including the North American Free Trade Agreement (NAFTA).
The impact of NAFTA is apparent with commercial vehicles. Prior to NAFTA, Mexico exported 1,000 heavy-duty vehicles (GVW 7 or 8). In 2014, Mexico exported over 120,000 heavy-duty vehicles.
Outlook of the Mexican automotive aftermarket industry
According to the market research group Freedonia, the Mexican aftermarket totaled US$4.3 billion in 2016 and it represented 8% of total North American demand. Freedonia forecasts that to expand more than 6% per year through 2021 and will reach US$5.8 billion.
Mexico has a large fleet of older cars, providing big opportunities for service repair or aftermarket parts and accessories. Over half of Mexico’s vehicles in operation (VIO) are more than 10 years old with an average age of around 14 years. The combination of vehicle age, with poor road conditions that put a lot of wear and tear on vehicles, creates a prime market for aftermarket parts. In the Mexican automotive aftermarket, business opportunities includes parts for gasoline and diesel engines and transmissions, collision and service repair parts, electrical parts, vehicle maintenance, and auto shop repairing equipment.
The Mexican VIO profile is similar to the US, making US aftermarket parts an attractive export to Mexico. Popular car models in Mexico include the Chevrolet Aveo, Spark and Sonic; the Nissan Versa, Sentra, March (not available in the US) and Tsuro (discontinued, based on the Sentra); and the Volkswagen Jetta and Vento (not available in the US). In 2015, Nissan was the top selling OEM with 25.7 percent market share, followed by GM (19%), Volkswagen (13.3%), Toyota (6.3 %), Ford (6.5 %) and Honda (5.4 %). (Source: US International Trade Administration.)
For more information visit Pro México, a division of the Mexican Ministry of Economy , or the Mexican Automotive Industry Association (La Asociación Mexicana de la Industria Automotriz A.C., or AMIA), or Freedonia Group.