Will the EV Transition Pull Mexico’s Automotive Industry Out of Industrial ‘Long COVID’?
Tuesday, November 08, 2022
Mexico has been a growing leader in the automotive manufacturing industry for decades with companies from Japan, the U.S. and Germany frequently seeking out the low-cost yet highly capable workforce. In 2012 the country ranked as the 10th largest automotive producer in the world and in 2021 pushed out South Korea and claimed sixth place. But the Mexican National Institute of Statistics and Geography reported that in 2021 automotive production dropped by 20.25% across the country, and auto exports fell by 16.46%. The institute further reported that GM and Nissan were hit hard, with GM Mexico’s production falling by 43.7% in 2021, and Nissan Mexicana’s tumbling by 27.2%. Production halts occurred at three Nissan plants as raw materials and microchips became inaccessible.
Supply chain disintegration, the semiconductor shortage and halts in production are all effects of an industrial “long COVID.” But even after a dismal 2021, this May Nissan announced plans to invest $700 million over the next three years in its Mexican plants, including its facility in Aguascalientes.