Globalization: Mexico exports almost all motor vehicles it produces, but imports new cars

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Jan 082013

Which company exports the most motor vehicles in Mexico? In term of units exported, Ford was the leader with 449,925 units. Ford exported over 97% of the vehicles it made in Mexico in 2011. Though Ford sold many new cars in Mexico, virtually all were imports, mainly from the USA or Canada. GM was a relatively close second with 443,237 vehicles exported, 81% of the total produced.

VW was next with 439,925 units exported, 84% of their total. Nissan was fourth with 411,660 vehicles exported which was a significantly lower percentage (68%) of its total production. Nissan sells about a third of its Mexican produced vehicles in Mexico, by far the highest percentage among auto manufacturers in Mexico.

Chrysler/Fiat exported 266,117 vehicles, 79% of their total production. Toyota was next with 49,549 vehicles exported for an amazing 99.9% of the total manufactured. Surprisingly only 47 of the almost 50,000 Toyotas made in Mexico in 2011 were sold in Mexico; all of the rest were exported to the USA or Canada. Virtually all of the thousands of new Toyotas sold in Mexico are imported. This is a very extreme case of globalization at work under NAFTA. Honda exported 36,429 units in 2011 for 80% of its total production.

Data are not yet available to determine which companies will lead in exports in 2012 and the percentage of total production that is exported. Overall production is expected to rise by over 20% in 2012 and perhaps even faster in future years judging by the amount auto companies are currently investing in Mexico. Obviously, production levels in 2013 and beyond will be closely tied to demand in the USA and Canada.

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Which company produces the most motor vehicles in Mexico?

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Dec 292012

Back in 2006, General Motors (GM) was the clear leader in production with 493,841 units (just over 25% of the national total). Nissan was second with 411,236 units (21%). These were followed by Volkswagen (VW) – 339,183; Ford – 329,993 and Chrysler – 307,344. The newcomers, Toyota and Honda trailed way behind with 33,835 and 24,297 units, respectively.

By 2011 the picture had changed considerably. All the manufacturers suffered major losses in 2009 as a result of the Great Recession, but all have recovered, some better than others. Between 2006 and 2011, Nissan increased total production by 48%. In 2011, Nissan led all producers with 607,087 units for almost 24% of the national total.

Nissan easily surpassed GM which increased 2006 to 2011 by only 10% for a total of 544,202 units. VW increased by an impressive 50% to 510,041 units. Ford nearly kept pace with an increase of 40% to 462,462 units. Chrysler with merged with Fiat matched GM with an increase of only 10% up to 338,772 vehicles. Toyota upped production by a very significant 47% to 49,596 units. Honda did even better, increasing its production by a whopping 87% to 45,390 units.

Final data are not yet available to determine which companies led production in 2012. Overall production was expected to rise by over 20% in 2012 and perhaps even faster in future years judging by the amount auto companies are currently investing in Mexico. Obviously, production levels in 2013 and beyond will be closely tied to demand which is linked to overall economic growth. Judging from the investment amounts announced so far, it appears that Nissan will retain its lead in total production, with VW and Ford perhaps challenging GM for second place.

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Mexican vehicle exports surge back after 2008-2009 recession

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Dec 202012

The Great Recession related to US housing and banking failures in 2009 hit the Mexican vehicle industry very hard. Production in Mexico declined by 28% from 2.10 million units 2008 to 1.51 million units in 2009. This dropped Mexico to 10th in the world. However, production shot up 50% in 2010 to 2.26 million and grew to 2.56 million in 2011 (data from Mexican Automotive Industry Assn.) It is expected to hit 3.1million in 2012. This enabled Mexico to move past Spain and France into 8th place.

Virtually all of this growth has been in the export sector. In 2011, almost 84% of all vehicles made in Mexico were exported. In fact, sales of Mexican made new cars in Mexico dropped from 1.1 million in 2007 to 0.76 million in 2009. It only rebounded to 0.82 million in 2011. It is expected to increase 11% in 2012 to 1.0 million, still lower than the 2007 level.

In 2011, almost 84% of all vehicles made in Mexico were exported. This export percentage clearly suggests that these manufacturers are primarily focused on selling their Mexican made vehicles in the USA and Canada.

Production is expected to continue increasing rapidly in the years ahead as evidenced by the following recent news releases:

Source of data:

Mexican Automotive Industry Assn. “Mexico’s Automotive Production & Exports Hits Record High in November (2012)”  (pdf file)

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The geography of cement production in Mexico

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Nov 102012

In a recent post we saw how Mexico is one of the world’s leading cement manufacturing countries:

The map shows the location of the 34 cement plants currently operating in Mexico. They include 15 belonging to Cemex, 7 to Holcim Apasco, 4 to Cruz Azul, 3 to Cementos Chihuahua, 3 to Cementos Moctezuma and 2 to Lafarge. A new company, Cementos Fortaleza (part-owned by Carlos Slim, the world’s richest man), is due to open in the state of Hidalgo early next year.

Cement plants in Mexico, 2011

Cement plants in Mexico, 2011. Credit: Tony Burton / Geo-Mexico; all rights reserved. Click to enlarge.

According to the Center for Clean Air Policy’s “Sector-based Approaches Case Study: Mexico”,

“The northern region of the country has traditionally been the largest consumer of cement, accounting for 48% of sales mainly for use in infrastructure construction projects, housing and office complexes, and other construction activities. Central Mexico is also a relatively strong market for domestic producers. However, the primary use differs somewhat in that the main source of demand is from construction of new buildings such as hotels and office complexes. The relatively slower pace of economic growth in southern Mexico accounts for the lower share (17%) of domestic cement sales in the south.”

The paucity of cement plants in southern Mexico is particularly well reflected by the map.

The main raw material for cement is limestone. The distribution of cement plants in Mexico tends to follow the distribution of “limestones and clastic rocks” (rocks made of particles of other rocks) on the map of Mexico’s surface geology.

Mexico's surface geology

Mexico’s surface geology. Click map to enlarge.

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Cement production in Mexico

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Nov 032012

In 2011, Mexico produced 35.4 million tons of cement, 3% more than a year earlier. The first cement-making plant was built in Mexico in 1906, a few years after cement was first officially approved for use in the construction sector. Cement demand grew only slowly prior to a spate of public infrastructure projects in the mid 1940s.

Cement production in Mexico, 1999-2011

Cement production in Mexico, 1999-2011. Source: Camara Nacional de Cemento

There are currently six major cement makers in Mexico. About 20% of production is sold in bulk to large construction companies. The remaining 80% of production is sold in 50-kg bags, used either by formal residential construction firms (50% of the total) or in informal (do-it-yourself) projects (32% of all purchases).

Cemex holds a 49% share of the domestic market, followed by Holcim Apasco (21%), Cruz Azul (16%), Cementos Moctezuma (10%). The remaining 4% is split between Cementos Chihuahua and Lafarge Cementos. A seventh company, Cementos Fortaleza (part-owned by Carlos Slim, the world’s richest man), is due to open early next year.

Cemex, based in Monterrey, is one of Mexico’s most important multinational companies. It is the world’s third largest cement producer and distributor, with operations in fifty countries worldwide. In 2004 Cemex received the Wharton Infosys Business Transformation Award for its creative and efficient use of information technology. Before Cemex, who had ever heard of cement mixers, armed with GPS devices, satellite links and computer systems hooked up via satellite links to the parent company’s HQ, cruising cities? The strategy allowed the company to achieve enviable levels of operating efficiency while meeting demanding delivery deadlines even in congested urban areas such as Mexico City.

China leads the world in terms of the volume of cement production, making around 2,000 million metric tons (mmt) a year, followed by India (710 mmt), Iran (72), USA (68), Turkey (64), Brazil (63) and Russia (52). Mexico (35.4) places 15th on the list, behind Japan, South Korea, Egypt and Thailand, but ahead of Germany, Indonesia, France, Canada, the UK and Spain.

On a per person basis, annual cement consumption in Mexico is about 300 kg/person, well below the levels recorded in the USA (1100 kg) and elsewhere. (The extreme cement consumer in recent years has been Dubai, with the staggering figure of 8000 kg/person!) Cement production may be a good indicator of how much construction is taking place, but is not very good news for the environment and climate change, since high quantities of carbon dioxide are released into the atmosphere during the production process. Globally, cement making is responsible for up to 10% of people’s total carbon dioxide emissions each year.

The carbon dioxide comes from three distinct sources:

  • During the conversion of raw materials into clinker
  • From the combustion of fuels needed in the cement kilns
  • Indirectly, from producing the energy required to power production machinery such as grinders and electric motors.

However, according to the Center for Clean Air Policy’s Sector-based Approaches Case Study: Mexico,

“Mexico’s cement industry is among the most modern and efficient in the world today. All the 50-plus kilns operating in the country’s 34 cement plants are dry-process. Mexico’s cement manufacturers are also using energy efficiency enhancing technologies such as preheaters and precalciners in many of their facilities. Moreover, a number of plants make use of some forms of low carbon alternative fuels.”

“Between 1992 and 2003, emissions of CO2 by the cement industry in Mexico increased roughly 25%. This compares with a nearly 108% increase in cement sector emissions from all developing countries during that same time frame and a 34% increase in U.S. cement industry emissions. The relatively slow growth of emissions from Mexico’s cement sector is an indication of the high overall efficiency of the sector.”

A future post will look at the location of cement plants in Mexico.

Sep 292012

Industrial exports from Mexico are growing rapidly and diversifying. Some of this growth is coming at the expense of China and other Asian countries. For example, as Adam Thompson reported in the Financial Times, Siemens of Germany recently moved its facilities for assembling high voltage electrical equipment for power substations from China and India to Querétero, Mexico. By next year, most of the 160 parts for this equipment will also be produced in Mexico. Siemens has eight other factories in Mexico and over 6,000 employees. As a result of investments like this, Mexico now exports more manufactured products than the rest of Latin America combined.

It is well known that the USA imports a great deal of manufactured goods from China including toys, electronics, clothing, shoes, etc. But China’s market share of US imports has declined recently, from 29.3% in 2009 to 26.4% to day. On the other hand, Mexico’s market share has increased from 11.0% in 2005 to 14.2%. According to The Economist, “HSBC reckons that by 2018 Mexico will overtake Canada and China to become America’s main source of imports”.

Mexico’s location next to the giant US consumer market is a big factor (see “US firms are near-shoring jobs from China to Mexico”.

It is much faster and cheaper to ship goods from Mexico to the USA rather than from Asia. For example, it usually takes two to seven days from Mexico versus 20 to 60 days from China. Mexico’s locational advantage is particularly important for trendy time-sensitive goods and bulky items. For example, in 2009 Mexico became the world’s leading exporter of flat-screen TVs, surpassing South Korea and China. Mexico is also the leading supplier of smartphones for the US market. Furthermore, as Itizar Gomez Jimenez reports in “Beyond the Refrigerator Door: Success of the Electric Home Appliance industry in Mexico”, most of the large household appliances sold in the USA come from Mexico, including refrigerators, kitchen ranges, dishwashers, microwave ovens, washers and dryers.

Attractive wage rates in Mexico are also a consideration. A decade ago wages in Mexico were roughly four times those in China, but now they are only about 30% higher and the gap is closing (see, “Rising Chinese labor costs: good news for Mexico”). Less red tape under NAFTA also gives Mexico an advantage (see, “Can Mexico’s industry compete with China?”). Mexico is fully committed to globalization. It has free trade agreements with 44 other countries, twice as many as China and four times as many as Brazil. To date, drug war violence has not been a serious constraint to Mexico’s growing manufactured exports.

logo-made-in-mexicoMexico’s maquiladora export industries used to assemble mostly imported parts into finished products for export to the USA. Now, most of the parts are manufactured in Mexico for such industries as electronics, automobiles, appliances and airplanes. (see: “Mexico’s vibrant autoparts sector” and “The reasons why Mexico is fast becoming a key player in aerospace manufacturing). Mexico is also broadening its export market. In 2000, about 90% of Mexico’s exports went to the USA, but now it is down to 80%. Mexico is even exporting manufactured items to China such as the new Chrysler Fiat-500 micro automobile.

While Mexico manufactures products under the names of many foreign brands, it also has its own brands and OEM (original equipment manufacturer) companies that design and build products that are incorporated into foreign branded products. For example, Mexico’s Mabe designs and builds two-thirds of the gas ranges and refrigerators imported into the USA. Furthermore, most of the appliances sold under the General Electric brand in North and South America are manufactured by Mabe. LANIX, Mexico’s largest domestic electronics company, makes desktops, laptops, netbooks, tablets, LCD and LED TV and monitors and smartphones for a range of brand names.

A careful look around a typical household in the USA would reveal that many, perhaps a majority, of the durable manufactured goods would carry a “Made in Mexico” label, including automobiles, flat panel TVs, smartphones, all types of appliances, garden and small power tools, etc. etc.


  • Adam Thomson, “Mexico: China’s unlikely challenger.The Financial Times, September 19, 2012 (registration required).
  • Itizar Gomez Jimenez, “Beyond the Refrigerator Door: Success of the Electric Home Appliance industry in Mexico” (pdf file). Cover Feature: Domestic Consume.

Related posts (specific industries):

Sep 202012

Mexico is rapidly becoming a world leader in vehicle production, which includes cars, commercial vehicles such as large trucks, pick-ups and SUVs (sports utility vehicles). Back in 1995, Mexico produced fewer than a million vehicles and ranked 12th globally. By 2011 it was making 2.68 million, placing it 8th in the world (see table). During the 16 year period, Mexico surpassed France, Canada, the U.K., Russia, Italy and Spain. China and India moved ahead of Mexico during the period.

Mexico’s impressive 1995 to 2011 growth of 185% was third among top vehicle producers, but trailed way behind the amazing growth of China at 1170% and India at 515%. Others experiencing significant growth include Brazil up 109%, Russia up 101%, South Korea up 84% and Germany up 35%. Except for Spain, which edged up less than 1%, all the other other major vehicle producers experienced significant declines in the number of vehicles produced: USA (- 28%), Japan (-18%), U.K. (-17%), France (-15%) and Canada (-12%). The data clearly indicate that vehicle production is shifting rather quickly from the major producers of past decades to a number of emerging economies with lower labor costs. Germany appears to be the only exception to this shift. In North America, production has shifted from the USA and Canada to Mexico, largely as a result of NAFTA.

2011 Production Statistics (Source: International Organization of Motor Vehicle Manufacturers)

Country Cars Commercial vehicles
Total Change from 2010
(millions of vehicles)
China 14.5 3.9 18.4 0.8%
USA 3.0 5.7 8.7 11.5%
Japan 7.2 1.2 8.4 –12.8%
Germany 5.9 0.4 6.3 6.9%
South Korea 4.2 0.4 4.7 9.0%
India 3.0 0.9 3.9 10.4%
Brazil 2.5 0.9 3.4 0.7%
MEXICO 1.7 1.0 2.7 14.4%
Spain 1.8 0.5 2.4 –1.4%
France 1.9 0.4 2.3 2.9%
Canada 1.0 1.1 2.1 3.2%
Russia 1.7 0.2 2.0 41.7%
TOTAL 59.9 20.2 80.1 3.1%


Mexico vehicle production grew by over 14% from 2010 to 2011, the fastest among all major producers except Russia, which advanced at a very impressive 42% (see table). Available data indicate that Mexico’s rapid growth has continued into 2012. Interestingly, the USA’s growth of 12% over its lackluster 2010 total placed it 3rd, ahead of India (10%), South Korea (9%) and Germany (7%). Surprisingly, Brazil and China grew by less than 1%, though China’s 2011 production level of over 18 million vehicles was over twice as many as its nearest rivals, the USA and Japan.

Just looking at commercial vehicles, which include pick-ups and SUVs, Mexico ranks a very impressive 5th in the world with over a million vehicles, behind only the USA, China, Japan and Canada. On this list, Germany and South Korea drop back to 11th and 12th behind Thailand, India, Brazil, Turkey and Spain.

Source of data:

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Mexico’s vibrant autoparts sector

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Sep 102011

In previous posts in this mini-series, we have seen where Mexico’s vehicle assembly plants are located and looked at some of the reasons for Mexico’s success in this industrial sector. In this post, we consider the importance of the autoparts industry.

Each year, Mexico makes about 2 million vehicles, of which about 1.5 million are for export. Vehicle manufacturing is heavily dependent on parts manufacturers and suppliers. Vehicle assembly plants often require parts to be delivered in a “just in time” basis, to reduce the costs associated with warehousing and inventory. Mexico’s autoparts industry has grown rapidly in the last decade, and now accounts for about 7% of all the GDP derived from manufacturing activities, and for more than 8% of all manufactured exports.

The autoparts sector comprises about 1100 companies, one-third of which are Mexican-owned or controlled. Autoparts manufacturers employ more than 400,000 workers nationwide and exports of autoparts to the USA are worth more than $25 billion a year.

Car factories breed tire factories. Bridgestone, the Japanese tire-maker, and Pirelli, its Italian counterpart, are both investing in Mexico this year, expanding their production facilities and supply of tires to the North American market. Bridgestone is spending $100 million to upgrade its plants in Cuernavaca (Morelos) and Monterrey (Nuevo León), allowing production to rise to 10 million tires a year. Bridgestone also operates a retreading facility for truck tires in León, Guanajuato. Meanwhile, Pirelli is building a 210-million-dollar factory in Silao (Guanajuato) which will turn out 3 million high performance tires each year.

Good-Year campaign to recycle tires

Goodyear recycles tires

Related links:

For a useful map of major scrap tire piles either side of the border and a scary count of scrap tires, see Border 2012: U.S.–Mexico Border Scrap Tire Inventory, Summary Report (May 2007) (pdf file)

For some other (fun and extraordinary) ideas as to how old tires can be re-used, see Tires as Art.