Mexico reduces decline in automotive assembly

Following the implementation of a tariff regime in the United States for the sector that is less aggressive for Mexico, our country's automotive production and exports softened their decline last May.

The assembly and shipments of light vehicles in Mexico decreased by 2% and 2.9% respectively during the fifth month of the year, the National Institute of Geography and Statistics (INEGI) reported on Monday.

Automotive companies have seen two consecutive months of declines in production, exports, and domestic sales, but the declines last May were smaller than those in April, when the United States, the main market for Mexican assembly plants, imposed widespread tariffs of 25% on imported light and heavy vehicles.

During the fifth month of the year, production fell 2% to 358,209 units, a smaller decline than the 9.9% observed in April, while exports fell 2.9% to 301,112 units, compared to a 10.9% decline in the previous month.

Despite this year-over-year contraction, the recorded volume makes May 2025 the second-highest production May, only after 2024, since the Administrative Registry of the Light Vehicle Automotive Industry (RAIAVL) began, reported the Mexican Association of the Automotive Industry (AMIA). On May 20, Marcelo Ebrard, Secretary of the Economy, reported that the United States reduced the approximate average tariff on imported cars originating in Mexico from 25% to 15%.

"Vehicles manufactured in Mexico will receive a discount of around 40% on that tariff (25%), but in some cases it may be higher," he said at the time, adding that only the tariff corresponding to the non-US content of each exported vehicle will be paid.

He explained it this way: "From now on, and once this new regulation comes into effect, vehicles made in Mexico and headed to the United States, instead of paying 25%, will pay around 15 percent."

Mazda, General Motors, and Volkswagen were the brands most affected by the tariffs, with shipments falling by 63.1%, 18.4%, and 32.4%, respectively. Toyota and Honda achieved significant growth of 29.6% and 28.7% during May.

Julio Galván, representative of the National Auto Parts Industry (INA), commented that the change in auto production lines in Mexico and the United States will lead to a decrease in the margin for regular assembly.

In the January-May cumulative period, more than 1.6 million units were produced, representing a 0.5% decrease compared to the same period in 2024. "This figure constitutes the third-best historical result for a cumulative period, surpassed only by those observed in 2019 and 2024," AMIA said.

Auto exports during the first five months of 2025 exceeded 1.3 million units, despite registering a 6.3% contraction compared to the same period in 2024. This performance places the January-May 2025 period as the fourth best start to a year in terms of exports for the Mexican automotive industry.

According to the AMIA report, in the first five months of 2025, 16.3% of vehicles sold in the United States were assembled in Mexico, a factor that maintains the Mexican industry as the main supplier of automobiles in that market. Mexico alone ships nearly 240,000 units per month, compared to 130,000 from South Korea, its closest competitor in the U.S. market, a result of the automotive industry's productive chain in North America.

Of Mexico's total production, 80.9% of auto exports went to the United States.