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    Mexicos AutoMotive

    SectorMay 2007

    Prepared by: Office of Representation of Mexicos Secretary of Economy in Japan

    Mexico-Japan Economic Partnership Agreement

    Embassy of Mexico

    Email: [email protected], Tel. 3506-6681

    mailto:[email protected]:[email protected]
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    Mexicos AutomotiveSector

    Mexicos automotive industryis one of the countrys mostimportant sectors in terms ofFDI, exports, and employment

    Mexico is one of the top ten

    global manufacturers ofvehicles

    In 2006, Mexico produced1,978,771 vehicles

    During the first four months of2007, Mexico produced597,382 automobiles

    0

    200,000400,000

    600,000

    800,000

    1,000,000

    1,200,0001,400,000

    1,600,000

    1,800,000

    2,000,000

    2003 2004 2005 2006

    Nu

    mberofVehicles

    Source: Mexican Association of Automotive Industry

    (AMIA)

    Mexicos annual vehicle production

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    Mexico: Among the Worlds Top Ten Countries in the

    Production and Exports of Automobiles

    FTA European

    Union

    CEAArgentina

    FTA Chile

    FTA

    NicaraguaFTA

    Costa Rica

    FTA Bolivia

    FTA

    Colombia

    NAFTAFTA Japan

    FTA

    Honduras

    El Salvador and

    Guatemala

    FTA Israel

    CEABrazil

    FTA Uruguay

    Automotive products and finished vehicles produced in Mexico are

    exported to more than 30 countries, including Japan, under preferential

    market access through Mexicos FTA network

    FTA EFTA

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    Mexicos Automobile Exports

    0

    200,000

    400,000

    600,000

    800,000

    1,000,000

    1,200,000

    1,400,000

    1,600,000

    2003 2004 2005 2006

    NumberofV

    ehicles

    Source: Mexican Association of Automotive

    Industry (AMIA)

    In 2006, Mexico

    exported1,536,768

    vehicles, a29.5%increase from the

    previous year

    From January to April

    2007, Mexico exported

    449,338 vehicles

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    Mexicos Autopart Industry

    The autopart industry in Mexico comprises

    approximately 350 companies in the Tier 1

    category. About two thirds of those

    companies are foreign owned

    Mexico needs to expand its manufacturing

    base in Tier 2 and 3 suppliers. The Mexico-

    Japan EPA represents an opportunity to

    Japanese autopart companies in Mexicos

    growing automotive manufacturing sector

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    Structure of Mexicos Auto Parts Industry

    Tier 2

    Tier 1

    Tier 3

    Assemblers

    345 companies

    (mostly foreign)

    14 companies

    Source: INA (Mexicos National Industry of Autoparts)

    7.0% of Total Manufacturing GDP

    8.1% of Total Manufacturing Exports

    Total Production: 1.677 Billion Dollars

    (Estimated, 2004)

    Parts Suppliers

    Approx.

    1,000 companies

    (About 30%

    are domestic)

    Casting

    Components, Press,Plastic, Aluminum,

    Logistics, Bearing,

    Machining, Die

    Casting & Molding,

    Machine Tools

    Air Conditioning,

    Engine Components,

    Steering, Suspension,

    Logistics, Die Casting& Molding, Electronic

    Components

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    Strengthening of Mexicos Support Industries

    Mexicos Ministry of Economy Fosters the Formation ofSupporting Industries in the Auto Parts Sector

    StrengtheningMexican Small and

    Medium Enterprises

    Strengthening

    Competitiveness

    of Japanese Companies

    in Mexico

    Formation of

    Mexico-Japan Supply Chain

    Win-Win Business Opportunities

    Strategic Alliances between Japanese SMEs and

    Mexican companies to become suppliers

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    Mexicos Exports ofAutoparts

    According to the USDepartment ofCommerce, in 2006,Mexico was the US

    largest supplier ofmotor vehicle parts

    In 2006, Mexicanexports of motor

    vehicle parts to theUS totaled 21 billiondollars, an increaseof 7.4% from a yearearlier

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    Mexico Canada Japan

    Motor Vehicle parts imported by the US

    in 2006

    MillionUSD

    Source: US Department of Commerce

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    MEXICO TOTAL VEHICLE SALES

    2005, 2006 and 2007

    PASSENGER VEHICLES 713,379

    COMMERCIAL VEHICLES 415,974

    2005 1,129,353

    PASSENGER VEHICLES 680,942COMMERCIAL VEHICLES 455,929

    2006 1,136,871

    Source: Mexican Association of Automobile Dealerships (AMDA)

    PASSENGER VEHICLES 166,486

    COMMERCIAL VEHICLES 112,141

    January-March 2007 278,627

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    MEXICO TOTAL VEHICLE SALES, EXPORTS

    AND PRODUCTION

    2004, 2005, 2006 and 2007

    Source: Mexican Automotive Manufacturers Association (AMIA)

    SALES Exports Total

    ProductionRetail Sales Whole Sales

    2004 1,095,796 1,096,777 1,094,306 1,507,175

    2005 1,131,768 1,128,397 1,186,346 1,606,460

    2006 1,139,718 1,160,037 1,536,768 1,978,771

    January-April

    2007

    355,235 349,605 449,338 597,382

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    Production of Japanese Car Companies Manufacturing

    in Mexico

    Honda Nissan Toyota Total*

    Total 2006 24,262 408,439 33,209 465,910

    2006- 2005 % 3.1 17 n.c. 25

    January 2,130 47,120 -- 49,250

    February 1,912 40,750 2,332 44,994

    March 2,150 42,467 5,226 49,843

    April 942 37,301 1,922 40,165

    2007 Acum. 7,134 167,638 9,480 184,252

    Jan-April

    06/07 % - 12.9 30.1 - 18.8 23.8

    Source: Mexican Automotive Manufacturers Association (AMIA)

    * Automobiles

    In 2006, Japanese

    car companies were

    responsible for 24%of Mexicos total

    production

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    Retail Sales of Japanese Car Companies in Mexico

    Acura HondaMazda

    ** Mitsubishi NissanSubaru

    **

    Suzuki

    ** Toyota Total*

    Total 2006 1,631 47,471 7,495 16,751 228,315 308 4,413 60,088 366,472

    % 2006-

    2005 58.3 23.9 n.c. 11.6 -2.8 n.c. n.c. 70.1 0.7

    January 174 4,112 1,100 1,478 19,261 44 448 4,357 30,974

    February 156 3,596 1,166 1,313 18,026 45 404 4,166 28,872

    March 124 4,097 1,356 1,500 18,358 40 401 5,804 31,680

    April 124 3,419 1,154 954 14,115 34 329 4,549 24,678

    2007Acum 578 15,224 4,776 5,245 69,760 163 1,528 18,876 166,204

    % Jan-April

    06/07 37 1.6 168.9 1.4 - 3.2 n.c. 24.3 16.9 3.9

    Source: Mexican Automotive Manufacturers Association (AMIA)

    * Automobiles ** New entrants in Mexico as a result of the EPA quota system

    In 2006

    Japanese

    automotive

    companies sold

    366,472vehiclesin Mexico,

    increasing to

    32% their

    market share in

    the Mexican car

    market

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    Exports of Japanese Car Companies Established in

    Mexico

    Honda Nissan Toyota Total*

    Total 2006 15,107 208,820 10,111 234,038

    % 2006-2005 4.2 33.5 n.c. 29.5

    January 1,155 24,734 -- 25,889

    February 1,140 24,639 2,332 28,111

    March 1,902 27,890 5,226 35,018

    April 150 18,294 1,922 20,366

    2007 Acum. 4,347 95,557 9,480 109,348

    % Jan-April

    06/07 - 14.2 67.9 n.c 76.4

    Source: Mexican Automotive Manufacturers Association

    (AMIA)

    * Automobiles

    In 2006,Japanese car

    companies

    manufacturing in

    Mexico accounted

    for 15.2% of the

    country's

    automobile

    exports

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    Mexico-Japan Economic Partnership

    Agreement

    The EPA has also contributed to the establishmentof four new Japanese companies in Mexico that arenow selling vehicles in the domestic market: Mazda,

    Isuzu, Subaru and Suzuki . In late 2007, Hinomotors will start commercialization of trucks inMexico.

    For fiscal year 2007 (April 2, 2007 to March 31,2008) the EPA has allocated a quota of 56,844vehicles to be imported to Mexico from Japan.

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    Import Quota for Japanese Car Manufacturers(General Tariff will be eliminated in April 2011)

    Company

    Unilateral Quota*1 M-J EPA Quota Total*2

    2005 2006 2005 2006 2005 2006

    Established in Mexico 58,218 65,305 46,599 45,270 104,817 110,575

    Nissan 27,218 29,305 23,718 23,029 50,936 52,334

    Honda 5,000 9,000 8,900 8,652 13,900 17,652

    Toyota 16,000 17,000 6,664 6,487 22,664 23,487

    Mitsubishi*3 10,000 10,000 7,317 7,102 17,317 17,102

    Newly Entered in Mexico 0 0 8,240 11,315 8,240 11,315

    Mazda 0 0 3,340 5,502 340 5,502

    Suzuki 0 0 3,000 4,092 3,000 4,092

    Isuzu 0 0 1,900 1,221 1,900 1,221

    Subaru 0 0 0 500 0 500

    Unused Quota 0 0 0 0 0 0

    Total 58,218 65,305 54,839 56,585 121,297 121,890

    (Unit: vehicles)

    *1) Car manufacturers that produce in Mexico are given quotas for units equivalent to 10%

    of its annual production

    *2) EPA quotas are given for units equivalent to 5% of the total sales in the previous year

    *3) Mitsubishi uses quotas allocated to Daimler Chrysler

    Source: Mexicos Secretary of Economy