Mexico’s automotive industry accounts for 4.5% of GDP and 31% of manufacturing exports, yet structural dependence on imported intermediate goods and high input costs continue to limit domestic value capture and supplier development. The challenge lies in strengthening local production of components such as specialized fasteners, precision metal parts, and electronic systems, which remain largely sourced from abroad despite the country’s position as a global vehicle exporter, according to analysts interviewed by Expansion.

Mexico ranks as the world’s seventh-largest vehicle producer and the second-largest automotive exporter in the Americas, with nearly 90% of exports destined for the United States. In 2025, automotive exports exceeded US$185.7 billion, according to official trade data. 

A significant share of these inputs is imported, mainly from the United States and China. Data from the National Auto Parts Industry (INA) shows that 16% of components entering Mexico originate from China, making it the country’s second-largest supplier after the United States. While imports from the United States align with regional content requirements under the USMCA, Chinese imports are largely driven by cost advantages.

Alejandro Osorio, Director of Public Affairs and Communications, National Association of Bus, Truck, and Tractor Producers (ANPACT), said the trend presents multiple challenges. “We are seeing accelerated growth in imports of heavy vehicles and components from China, which creates significant challenges in regulatory compliance, local supplier development, and the channeling of incentives toward productive investment in the country,” he said.

Osorio pointed to areas where Mexico could expand its participation, including advanced fasteners and electronic components. These segments already exist within the domestic industrial base but require further investment and technological upgrades to compete with international suppliers.

The discussion extends beyond the automotive sector to other manufacturing industries, including appliances, where supply chain integration follows similar patterns. Fernando González, Country Manager, SEGULA Technologies, said Mexico has the capacity to scale existing processes but must evolve its manufacturing model.

“These are components that Mexico has traditionally localized and where the automotive industry has been very successful. There is a significant opportunity in what we now consider traditional components. However, they require disruption: we must begin to develop components that align with existing business lines while incorporating new tooling and new forms of production,” he said.

González added that the transition requires moving beyond basic manufacturing toward higher-value production. “I do not like to say that Mexico is merely a manufacturing country. It is good that we were, and that it worked, but at this point we should be talking about Mexico becoming a power in technology and product development—in manufacturing with greater added value—and for that, all stakeholders need to be aligned,” he said.

Input costs remain a central constraint. Steel and aluminum prices in Mexico are significantly higher than in competing markets, affecting the viability of producing intermediate goods domestically. Alfonso Villa, Head of Business Development and Strategic Projects for the Americas, ZF, highlighted the cost disparity.

“Steel in Mexico can cost double or even triple what it does in China, so the question is how to compete under those conditions. In addition, for components that rely heavily on steel, the material can represent between 60% and 70% of the total production cost,” he said.

Production data shows a concentration in specific segments. Electrical parts account for 19.6% of national auto parts output, followed by transmissions and clutches at 9.3%, textiles and seating at 9.1%, engine parts at 8%, and gasoline engines at 6.3%. Together, these categories represented 52.3% of total sector production during the first two months of the year. 

Paulina Aguilar, Co-Founder and Chief Revenue Officer, MUNDI, said supplier integration is critical to maintaining competitiveness. “The start of 2026 is showing positive signals in the light-vehicle segment, with solid performance in sales and exports, confirming the resilience of the Mexican automotive industry despite a volatile international environment. However, we believe that the true competitive advantage lies not only with assemblers, but in the capacity for integration and sophistication of local suppliers. Domestic suppliers play a vital role in the operational efficiency of assemblers,” she said.

Operational efficiency also depends on logistics and supply chain coordination. Cristina Noemí Valdez, Head of Planning and Logistics, 4G Ingeniería, said component-handling systems are essential to maintaining production continuity. 

“In the automotive sector, every minute on the production line counts. Our solutions do not simply transport parts; they are part of the system that keeps the automotive industry moving. Our racks help optimize logistics flows, reduce idle time, and ensure component traceability within manufacturing plants,” she said.