As the automotive industry in Mexico marks more than 100 years of growth, it is now ranked as the world’s sixth biggest auto parts producer and is experiencing peak investment levels as in recent years major players like Toyota, BMW, Mazda, Audi and Honda have joined the ranks of General Motors, Ford, Chrysler, Volkswagen, Nissan, Fiat and others (a total of over 40 companies producing more than 400 models and associated parts lines) with major production centres established throughout the country. Forbes magazine estimates that production has more than doubled since 2010, with over $19 billion in investment flooding into the country in a period of five years. Automotive News reports that in the first quarter of 2017, the Mexican auto industry is breaking records with production up 17% and exports ahead by 14%. Financial markets and forex specialist Pablo Soria de Lachica offers a seasoned perspective on this impressive growth, attributing Mexico’s progress to its key geographic positioning, wide range of free trade agreements and some of the lowest manufacturing costs in the world.
Ideally positioned between the Atlantic and Pacific Oceans, with direct shipping access to Europe, Asia, Africa and South America, Mexico is reaping the benefits of its central global geographic location, shipping $373.9 billion worth of product worldwide in 2016. Importantly, it shares a border with its largest trading partner—the United States, where 81% ($303 billion) of exports flowed last year. Pablo Soria de Lachica is among many experts who predict the Mexican auto parts industry will trend positively towards $90 billion in total sales for 2017, after reaching $88.4 billion in 2016 (with $73.8 billion in exports) as reported by Export.gov. Capitalizing on its ideal geographical situation with its well-established shipping trade routes, Mexico is poised to continue exceeding expectations and attracting foreign investment in the auto parts sector.
Research group ‘World’s Top Exports’ notes remarkable and significant increases in export to many countries over the period of 2009 to 2016, with notable gains of 407% total value of trade with South Korea and 303% with France. While these surges are linked to a number of factors, they are facilitated by Mexico’s 11 free trade agreements with 46 countries, in combination with auto parts manufacturing costs that are reported to be lower than China’s and consistently 10 percent lower than the United States. Soria de Lachica points to the low wages (yet high skills) of the more than 750,000 people employed in the Mexican auto parts industry as a key factor in sustained competitiveness. He expects auto parts sales to exceed $100 billion by 2020.
Pablo Soria de Lachica holds a Master of Business Administration from the Universidad Tecnológico de México and works to educate and advise clients in business and finance, specializing in market analysis, foreign exchange, sales technologies and investment strategy. In collaboration with Kartoshka he provides customer management, sales and marketing tools to an international clientele. As an avid philanthropist, Mr. Soria de Lachica regularly contributes to projects and organizations which focus on environmental and community-strengthening causes.