Mexico’s automotive industry increased its substitution of imports with local sourcing in 1Q26, reaching more than US$8.8 billion in purchase requirements across over 1,100 requests, according to data from The Automotive Suppliers Association (CAPIM). The shift reflects adjustments linked to the upcoming 2026 review of the USMCA and evolving trade conditions, including tariffs on Asian imports.

From January to March 2026, demand for domestic suppliers rose 18% year over year. The data indicates that automakers operating in Mexico are expanding local procurement to comply with stricter rules of origin and manage external cost pressures. The increase spans multiple segments, including auto parts, production processes, indirect services and raw materials.

Auto parts accounted for 397 purchase requirements, followed by production processes with 373. Indirect services represented 279 requests, while raw materials totaled 53. Together, these categories reflect a broad shift in sourcing strategies across the automotive value chain.

René Mendoza, president, CAPIM, said the trend is directly linked to structural changes in global supply chains and trade policy. “In the first quarter of the year, the automotive industry intensified its import substitution strategy due to pressure from the US government ahead of the USMCA review,” he said. 

Mendoza noted that rising local demand is also driven by the need to increase regional content under USMCA rules. “This dynamism in demand for local inputs and services is due to adjustments in global supply chains, as well as the commercial conditions automakers face in increasing regional content,” he said.

The shift extends beyond manufacturing inputs. According to CAPIM, growth is also concentrated in indirect services and technology-related solutions, including software and data storage.

“There is business opportunity across the entire automotive value chain,” Mendoza said. “When we discussed the USMCA review, we expected increased demand for auto parts and production processes. But with tariffs imposed on Asia, demand has expanded further toward service and technology providers.”

CAPIM noted that part of the growth reflects pending integration of April purchases, suggesting that first-half figures could show further expansion. The organization also indicated that companies continue to identify local suppliers capable of meeting quality, cost and compliance requirements under USMCA.

Mexico’s automotive industry is also facing renewed external pressure as US tariffs reshape production and export dynamics ahead of the USMCA review. Data from INEGI shows that vehicle production declined 0.9% in 2025, while exports fell 2.7%, reflecting the impact of a 25% tariff imposed by the US government in April on imported vehicles, later extended in May to auto parts that do not meet rules-of-origin requirements. 

The sector’s exposure to the US market remains high, with 78.4% of Mexican vehicle exports destined for the United States and 11.1% for Canada. The Asociación Mexicana de la Industria Automotriz (AMIA) highlighted the sector’s economic relevance, noting it accounts for nearly 4% of Mexico’s GDP and more than 20.5% of manufacturing GDP.