3 Mar 20

Mexico auto industry drives ahead amidst Coronavirus

The impact Coronavirus could have on world productivity has hit the headlines recently but is it really hitting Latin America? For this feature, we are eying Mexico

The virus, also known as COVID 19, has yet to make any real impact on automobile production in Mexico. However, the supply of automobile parts and components coming from Asia could decrease in coming months if the scenario for our neighbors to the East does not improve soon.

In the wake of China’s quarantine of the Hubei province which manufactures automotive components, parts ranging from screws and bolts to chips and computer sensors are scarcer but the region receiving the brunt of the impact for now is Asia. Approximately 40% of the suppliers in the region come from China, news service Infobae reported.

While Renault and Hyundai plants in South Korea have suspended production, the Nissan factory in Kyushi Japan has made production adjustments due to the shortage of parts.

As for North America, which includes the United States, Canada and Mexico,  some 25% of their suppliers come from China, the report said. 

In 2018, China exported US$25 billion in automotive components of which US$2.3 billion in goods went to Mexico, Latin America's second largest automobile producer, only behind Brazil.

In Mexico, auto components coming from Asia is second only to that of the United States. The best-selling brand in the country is Nissan, followed by General Motors, Volkswagen, Toyota and Kia.

For Toyota Motor Mexico, “the company, so far, continues to produce as usual,” says Guillermo Díaz who is operations director for Toyota Motor sales in Mexico. “For now, we have not seen an impact,” adds Kia Motors Mexico sales director David Garcia.

Toyota operations director Mexico, Guillermo Díaz (source: CarNews)

However, if the current (COVID-19) situation continues, Mexican shipping companies could soon begin to face supply problems, says Rafael López who is a car industry consultant and former Ford logistics manager in Mexico.

Regardless of what happens in the coming months, business must go on as usual. A resolution to the matter is likely around the corner. 

Authored by: Daniel Bland