Key Player: Julio Galván, Manager of Economic Studies at the Mexican National Association of Auto Parts (INA)
Julio Galván, the Manager of Economic Studies at the Industrial National Association of Auto Parts (INA), forecasts that Mexico will attract $2.4 billion in Foreign Direct Investment (IED) in the auto parts sector by 2026. This represents a 9% increase from the estimated $2.2 billion in 2025.
Context and Relevance
Mexico’s prominence in the US auto parts market has been growing, with a historical 46.2% market share in October 2025 and 43.8% for the January-October period of the same year. This positions Mexico as the primary supplier of automotive components to the US, surpassing both Canada and Asia.
The strengthening of supply chains in the auto parts sector, coupled with increased regional content with the US and the nearshoring 2.0 phenomenon in the automotive industry, has facilitated Mexico’s growth in attracting IED.
Current Trends and Projections
- Plant Expansions: Existing plants in Mexico are undergoing expansions, adding processing lines to meet the demand from the US market.
- IED Trends: IED in the auto parts sector is projected to grow by over 9% in 2026, driven by various ongoing projects catering to the US market demand.
- Historical Perspective: The highest IED peak was in 2018 with $4.53 billion, followed by $3.96 billion in 2021 and $3.014 billion in 2019.
Impact of Market Dynamics
Despite the uncertainty surrounding the review of the Mexico-United States-Canada Agreement (T-MEC), the auto parts industry in Mexico continues to thrive. The US market’s growth, as demonstrated by December’s auto sales increase in the US despite the end of electric vehicle incentives, supports this positive outlook.
Key Questions and Answers
- Q: What is the projected IED growth for Mexico’s auto parts sector in 2026? A: The IED is expected to grow by over 9% in the auto parts sector, with a projected $2.4 billion in investment by 2026.
- Q: How is Mexico’s market share in the US auto parts sector? A: Mexico holds a historical 46.2% market share in October 2025 and 43.8% for the January-October period, making it the primary supplier of automotive components to the US.
- Q: What are the factors contributing to Mexico’s growth in attracting IED? A: The strengthening of supply chains, increased regional content with the US, and the nearshoring 2.0 phenomenon in the automotive industry have facilitated Mexico’s growth in attracting IED.
- Q: What is the historical perspective of IED in Mexico’s auto parts sector? A: The highest IED peak was in 2018 with $4.53 billion, followed by $3.96 billion in 2021 and $3.014 billion in 2019.
Trade Performance and Balance
In terms of foreign trade, auto parts have been the mainstay of Mexico’s automotive performance. From January to October 2025, the sector’s exports totaled $86.758 billion, while imports reached $56.895 billion, resulting in a positive trade balance of nearly $30 billion.
