Mexico Could Become Fourth Largest Auto Parts Producer, Surpassing Germany, says INA President
At the end of next year, Mexico could become the fourth producer of auto parts in the world and stripping Germany, because it is expected the arrival of more companies that meet the demand of the BMW, Mercedes Benz, Toyota and automotive assemblers Chinese, said Oscar Albín, president of the National Auto Parts Industry (INA).
He said that this would lead to the production of 100,000 million dollars, with a 10% growth in new pieces, compared to 2018.
In an interview with El Economista, the representative of the companies of parts and components stressed that the trade war between China and the United States has pushed Chinese suppliers of electrical parts (batteries) and electronics (cables, sensors, others) to seek to settle in our country, They will no longer be able to absorb export costs from Asia with a 25% tariff imposed by Donald Trump.
“There is a series of products that are manufactured in China and is being considered, could be produced in Mexico,” said Albín.
At the end of 2018, the Mexican auto parts industry remained the fifth producer, below China, which occupies the first place, followed by the United States, Japan and Germany.
“Going beyond Germany is not about growing to grow, we have to take root and develop raw materials,” he explained.
According to the president of the INA, Mexico has to achieve productive linkages, for example, if the factory that has packaging and manufacturing, then you must become suppliers so that it is not so easy that you can move.
The advantage of Mexico is that it is at the center of the commercial world, to the south of the United States and within North America, and we have around 600 suppliers that are considered to be large exporters of parts throughout the world.
He said that geography also has a point in favor of Mexico , since transporting a container from our country to New York takes five days, while Los Angeles takes four days. Instead, doing it from China takes 32 days to New York and 18 days to Los Angeles.
“We have a logistical advantage against other important countries of international trade,” he said.
The logistics cost of transporting a container from Monterrey to Chicago is $ 3,000, while doing it from Shanghai to Chicago costs $ 5,000.
During the last three sexenios, but above all that of Enrique Peña Nieto, an exceptional work was done to raise capital in the automotive industry , since it has been counted that 36,000 million dollars landed. “This shows that we are an attractive country for foreign capital,” insisted Oscar Albín.
“While in the context of the North American Free Trade Agreement more than 17 million cars continue to be produced, like Mexico we are benefited. That if the United States is fighting with the world and has more factories installed in the region, I am happy, because Japan does not sell anything if it is a car made in that country, but if it is manufactured in the US, I sell it $ 4,000, “he concluded.
to parts industry remained the fifth largest producer, below China, the United States, Japan and Germany.
The official added that Mexico’s geographic location gives it a unique advantage. “We currently have around 600 suppliers that are considered big exporters of auto parts to the whole world because of that,” he added.
Albin cited some examples of this advantage, such as the fact that transporting a container from the central region of the country to New York takes five days, while taking it to Los Angeles requires four days. Instead, doing it from China takes 32 days to New York and 18 days to Los Angeles.
Another example is that the logistics cost of transporting a container from Monterrey to Chicago is US$ 3,000, while doing it from Shanghai to Chicago costs US$ 5,000.
As long as more than 17 million cars continue to be produced in North America, Mexico will benefit from it, said the official. “With the United States fighting the whole world and forcing more plants to install in the region, I’m ok with it, because I don’t sell anything to a car that’s made in Japan, but if it is manufactured in the U.S., I will sell it US$ 4,000 in parts,” he concluded.