Background on the Auto Parts Industry in Mexico
The auto parts industry in Mexico has seen a significant surge in Foreign Direct Investment (FDI) during the first quarter of 2025, with a 148% increase compared to the same period in 2024. This growth has positioned the United States as the primary source of capital, surpassing Germany.
Key Investors and Their Contributions
Gabriel Padilla, the General Director of the Mexican National Automotive Parts Industry (INA), reported that the auto parts sector in Mexico attracted $625 million in FDI during the first quarter of 2025, up from $252 million in the same period of 2024.
- United States: $308 million
- Germany: $220 million
- South Korea: $50 million
The recent investments primarily come from the United States, driven by automakers’ strategies to boost regional content amidst tariffs imposed by former U.S. President Donald Trump on automotive exports.
Shifting Investor Landscape
Until 2023, German companies were the leading investors in Mexico’s auto parts sector, fueled by demand from major car manufacturers based in Mexico. These German suppliers, catering to BMW, General Motors, Volkswagen, Audi, and Stellantis, accounted for nearly half of the investments in 2024.
However, their presence has decreased in the first quarter of 2025, with German investments now representing around 30% of the total FDI. Meanwhile, U.S. investments account for approximately 50%.
Mexico’s Dominance in Auto Parts Supply
Mexico remains the leading supplier of auto parts to the United States during the first quarter of 2025, accounting for 43.21% of U.S. total imports. Canada follows with 9.91%, and Japan takes third place with 7.72%.
FDI Accumulation and Growth
Since 2018, Mexico has accumulated $19,378 million in FDI for the auto parts sector by the first quarter of 2025. In 2024 alone, $2,467 million were captured, marking a nearly 22% increase. However, this figure is still below the record high of $3,964 million in 2021.
Top States for FDI in Auto Parts
The primary destinations for FDI in the auto parts sector during the first quarter of 2025 are:
- Chihuahua: 18.09% (home to Ford’s engine manufacturing complex, a significant industrial hub in North America)
- Nuevo León: 17.90% (KIA’s manufacturing location)
- Coahuila: 11.96% (General Motors and Stellantis plants)
- Puebla: 9.64%
- Estado de México: 8.96%
INA’s FDI Projections for 2025
The INA anticipates a growth in FDI for the auto parts sector, with estimates reaching $2,700 to $2,800 million by 2025.
Key Questions and Answers
- Who is Gabriel Padilla, and why is he relevant? Gabriel Padilla is the General Director of the Mexican National Automotive Parts Industry (INA). He is relevant because he provides insights into the FDI trends in Mexico’s auto parts sector.
- Why has the U.S. regained its position as the leading investor in Mexico’s auto parts sector? The U.S. has regained its position due to automakers’ strategies to increase regional content amidst tariffs imposed by former U.S. President Donald Trump on automotive exports.
- Which countries are the primary sources of FDI for Mexico’s auto parts sector in Q1 2025? The United States, Germany, and South Korea are the primary sources of FDI for Mexico’s auto parts sector in Q1 2025.
