AMIA President Addresses Industry Performance and Future Outlook
Querétaro, Qro. In the first quarter of the year, the automotive industry recorded a 4.8% annual growth in production, alongside a 6% annual decline in exports and a 3.3% rise in domestic sales, explained Rogelio Garza Garza, CEO of the Mexican Automotive Industry Association (AMIA).
Export Decline Not a Cause for Concern, Says AMIA President
Garza Garza highlighted that the 6% drop in exports should not be a cause for concern and urged waiting to see how the sector performed in April and subsequent months.
The first-quarter indicators reflect that the industry continues producing and remains competitive in the region, Garza Garza pointed out during his participation in the International Automotive Industrial Supply Summit (IAISS), a business conference held on May 7 and 8 in Querétaro.
“This 6% export figure is not a decline; we should wait for April, May, and beyond, as you know, tariffs impacted some companies causing them to halt exports temporarily to assess the negotiations and outcomes… We reached a point where companies faced up to 50% tariffs for exporting, so logically, some halted exports. However, this is now being released, and I believe it will gradually normalize,” he explained.
Production and Exports Remain Stable
In March alone, production grew by 12.1% annually; exports increased by 3.8%, and domestic sales saw a 1.3% annual variation in the third month of the year. With no reduction in production levels, Garza Garza noted that the industry continues to register orders.
“We keep exporting, maintaining our privileged position as the country that exports the most to the United States, sending the highest number of vehicles, and remaining a consolidated industry,” he declared.
Mexico’s Role as a Key Export Hub
The AMIA president explained the close relationship between production and export indicators, as Mexico has become a significant hub for producing goods destined for other markets.
In 2024, 79.7% of Mexico’s automotive exports went to the United States, while 8.5% headed to Canada. Other notable markets include Germany, Brazil, Colombia, Puerto Rico, and the United Kingdom. Mexican-produced vehicles account for 18% of light vehicles consumed in the United States.
“If the U.S. anticipates or sees less demand for automobiles, it could reflect in Mexican exports. However, there has been no impact on orders and purchase intentions yet; it’s been strategic adjustments to model configurations and logistics, as well as tariffs on exports,” he elaborated.
AMIA Works to Eliminate Tariffs
Garza Garza detailed the three types of tariffs implemented by the U.S.: the IEEPA, which imposes a 25% tariff on non-T-MEC goods, 0% on T-MEC merchandise, and 10% on energy and potash; Order Executive 232, applying a 25% tariff on imported vehicles, with Mexico benefiting from T-MEC preferences; and the reciprocal tariff, which does not affect Mexico or Canada.
“In the automotive sector, we have Order 232… If a vehicle shipped from here complies with the T-MEC rules and regulations, that vehicle can deduct U.S. content… Each model must be evaluated, but on average, U.S. content in vehicles is 40%, meaning a vehicle, on average, would only pay the 25% tariff (over the 60% non-U.S. content), resulting in an effective tariff of roughly 13 to 14% for vehicles complying with the treaty’s rules,” he explained.
AMIA and Federal Government Collaborate to Eliminate Tariffs
Regarding the impact of U.S. tariffs, Garza Garza emphasized that the AMIA, in collaboration with the federal government, is working to ensure the Mexican automotive industry remains tariff-free.
“We are constantly working with the Secretariat of Economy and fighting—as the Secretariat of Economy has informed us—to eliminate everything. Our goal is for the automotive industry to be entirely free of tariffs, so we are working on this, and I believe we will gradually improve these conditions in the coming months,” he stated.
