During 2018, the Coahuila as well as Mexican automotive industry in general kept their levels regarding production and export of cars despite the renegotiation of the North American Free Trade Agreement (NAFTA) which resulted on the new signing of the new United States, Mexico and Canada Agreement (USMCA.)

According to figures provided by the National Institute of Statistics and Geography (INEGI, by its Spanish initials) and the Mexican Automotive Industry Association (AMIA, by its Spanish initials) last year, 10 States concentrated 97.5 % of the automotive and trucks production in the country, among which Coahuila monopolizes the second step nationally.

The States that stood out for the manufacturing of vehicles were Sonora with 16.2 % of the total value of national production; Coahuila, with 15.9 %; and Puebla, with 13.6 percent.  Followed by Estado de Mexico, with 12.7 % of the total value of production; Guanajuato, with 10.4 %; Nuevo Leon, with 8.6 %; Aguascalientes, 6.8 %; production; Guanajuato, with 10.4 %; Nuevo Leon, with 8.6 %; Aguascalientes, 6.8 %; Baja California, 5.5 %; Morelos, with 5.2 %; and San Luis Potosi, with 2.6 percent.

While the creation of auto-parts, Coahuila led this sector, by producing 18.1 % of the auto-parts manufactured nationally; surpassing states such as Nuevo Leon, which contributes with 11.4 %; and Puebla, with 10.4 %, being the only entity located on the first places in the manufacturing of vehicles and auto-parts.

In Coahuila the automotive sector is very important regarding other manufacturing industries, representing more than half (63.4 %) of the manufacturing production of the entity.  Automotive companies are located in the State such as Fiat Chrysler Automobiles (FCA,) Daimler, Freightliner and General Motors (GM,) in Derramadero and Ramos Arizpe, respectively.

The document “Knowing the Automotive Industry” details that in Coahuila the production of automobiles and trucks represents 24.8 % of the manufacturing production in the State and one of its main supplies is the manufacturing of parts for vehicles that contributes with 22.1 % of the manufacturing production, locating as one of the States with more economic activities related with the automotive industry that registers regarding the manufacturing production.

During 2018, the automotive industry contributed 3.7 % of the national GDP and 20.2 % of the manufacturing GDP, being the second economic activity with the highest participation in manufacturing GDP of the food industry.

From 2010 to 2018, the GDP of the automotive industry grew 12.3 % average in real terms, impacting 90 economical activities in the secondary sector, and 70 in commerce and services.  Therefore, one of every five jobs on manufacturing industries belong to the automotive sector.

 

EXPORT TO THE RISE

In 2018, national export of vehicles grew 6.4 %, regarding the year before, with the shipment of 3 million 449.201 units, according to INEGI.  with this figure, today from every 100 vehicles sold in the American market, 15.1 % comes from Mexico.

Assemblers with the highest number of exports in 2018 were General Motors with 811,954 vehicles and a growth of 17 %; FCA with 626,677 vehicles, a 6.3 % more than the year before; and Nissan, with 496,333 thousand units for a growth of 5.8 percent.

On these sectors, Coahuila has consolidated as the leading exporter State, thanks to its two assemblers (FIAT Chrysler and General Motors) and the competitive advantages offered by the State to the Mexican Market.

Eduardo Solis, president of the Mexican Automotive Industry Association (AMIA, by its Spanish initials) explained that this increase resulted from a higher activity of the industry in the shipment of trucks, which have seen a higher demand abroad, mainly in the United States.  “The automotive industry continues to demonstrate that it is a fundamental sector for the economy,” he said.

The SUV Chevrolet Equinox manufactured in the GM complex in Ramos Arizpe, the fourth most exported vehicle only surpassed by Silverado Pickup, the SUV Jeep Compass and the Sedan Nissan Sentra.  Ford Fusion completes the top 5 of these lists, which represents almost 32 % of the total of units sent abroad.

“These five models represent 35.9 % of the total of vehicles assembled in Mexico for other markets, mainly for the United States, destination representing 75 % of the national total exports,” said the directive.

In second place was Canada with 7,4 %; followed by Germany with 4.4 %; Brazil with 2.3 %; and Colombia with 1.6 %.  “With the USMCA free trade will be kept among the three countries and that is the most important thing for the industry,” said Solis.

Regarding production, 3 million 908,139 vehicles were manufactured, a volume practically similar to the one from the year before.

 

 

2019 Outlook

For Eduardo Solis, 2019 will be a year of growth and without rapid changes in the Mexican automotive industry, despite that companies are prepared for the new rules in international trade matters with the USMCA, which will be valid as of 2020.

Meanwhile, the president of La Laguna Automotive Cluster, Jose Luis Hotema de Santiago assured that investments will continue to arrive in Coahuila, therefore he anticipated that for 2020 this sector will be strengthened and reaching a production of up to 5 million units per year.

“Investments will continue to be generated in Coahuila, remains to settle MAGNA and the installation of the Asian assembler, this will be without doubt two important achievements, as before that the supply chain will also grow in a very significant way,” he declared.

The arrival of Asian investments is expected in La Laguna including the so mentioned assembler, which will trigger the automotive industry in the region, as according to Jaime Guerra Perez, secretary of Economy in Coahuila, the importance of attracting assemblers to the State is because together with it are coming about 40 companies that will generate more jobs on the different regions of Coahuila.  “At least it will bring 40 additional companies, as country we know that Mexico is very attractive for Asia and China, as is a logistic center for its more than 40 Treaties,” he referred. 

“We will see the different assemblers, we are a strong automotive State and we continue working in attracting more assemblers,” said during his visit to the North American International Auto Show, celebrated in Detroit, Michigan.

RAM MANUFACTURED IN SALTILLO WAS AWARDED

One of the vehicles that contributed the most to the historical levels of production and exports is the RAM 1500, assembled at the FCA Derramadero, Coahuila complex, since it was the model most shipped from Mexico during 2017 and recently was awarded with the prize as the truck of the year at the Auto Show 2019, recognition that joins the ones achieved in the last year at the Truck of Texas and Motor Trend.

The distinction of the truck of the year, was at Detroit, Michigan, United States, where the launching of the RAM Heavy Duty 2019 was also held, also produced in Saltillo.

Regarding this, the mayor of Saltillo, Manolo Jimenez Salinas noted that the capital of Coahuila is today a national power which has an industrial zone that produces 28,000 million dollars per year.  “Thousands of vehicles are assembled per year, and one of these vehicles is the RAM, which is the most awarded truck worldwide,” he underlined.

The main destinations for the RAM 1500, model dedicated to cargo and small business movement, are the United States and Canada, as both countries monopolize the 99 % of exports.

The North American International Auto Show (NAIAS) is an international event in which the most standing out companies from the automotive sector participate, aiming to show their most recent innovations, programs and technologies.