Mexico’s auto parts manufacturing industry set a record for attracting investment

RIO DE JANEIRO, BRAZIL – Mexico captured US$3.964 billion dollars of Foreign Direct Investment (FDI) in the auto parts industry in 2021, a record in the first full year of implementation of the Mexico-US-Canada Agreement (T-MEC), which came into force in July 2020.

When the T-MEC came into operation, the rules of origin for the automotive sector were tightened in North America, with the aim of encouraging greater use of inputs, parts and components originating in the region in finished vehicles.

Thus, the link between the T-MEC and FDI inflows to Mexico is pertinent.

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In 2020, a year in which the Covid-19 pandemic hit the automotive industry particularly hard due to a shortage of semiconductor chips, Mexico attracted US$1.292 billion in the sector.

Further back, 2017 was the year in which the historical maximum in this indicator had been reached, capturing US$3.834 billion, an amount that has two weightings to consider: now it is compared to the preliminary figure of 2021, which normally tends to increase with subsequent updates, and in that year new automotive plants were being built or inaugurations were recent, which is not currently the case.

FDI in auto parts production in Mexico also broke a record in 2021 as a proportion of total flows into the country, reaching a share of 14.2%, according to data from the Ministry of Economy.

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