Record Vehicle Output Highlights Strength of Mexico’s Automotive Manufacturing Regions
Mexico’s automotive industry is undergoing a transformation, fueled by a network of regional clusters that are capturing the attention of global manufacturers and investors.
In 2024, Mexico manufactured a record-breaking 3.99 million light vehicles, surpassing the previous peak set in 2017. This marked a 5.56% increase over 2023, with nearly 87% of the units destined for export markets. The top five manufacturers, General Motors, Nissan, Stellantis, Ford, and Volkswagen, played a dominant role, with General Motors leading the group.
As nearshoring continues to reshape supply chains, Mexico’s strategic location, skilled workforce, and trade advantages have positioned it as a key player in the North American automotive landscape.
Mexico’s Key Automotive Manufacturing Locations
From the industrial cities of the north to the rapidly growing Bajío region, these clusters have become magnets for foreign direct investment. Monterrey and Saltillo, located in the northeast, offer a robust industrial base, particularly in steel, aluminum, and commercial vehicles. Kia and Daimler are among the companies driving innovation and production in the region.
Further south, the Bajío region—comprising Guanajuato, Querétaro, San Luis Potosí, Aguascalientes, and part of Jalisco—has developed into Mexico’s automotive heartland. In this corridor, original equipment manufacturers (OEMs) such as General Motors, Toyota, BMW, Nissan, and Honda operate major facilities focused on the assembly of light vehicles. These plants are supported by a strong network of Tier 1 and Tier 2 suppliers, rail and highway infrastructure access, and close coordination with logistics providers.
On the northern border, cities like Ciudad Juárez and Hermosillo have long been key manufacturing hubs for wiring harnesses, electronics, and components that cross the border daily. Hermosillo, in particular, has built a reputation as a center for light vehicle production, with Ford operating one of its most efficient assembly plants in the region. Ford also operates an engine manufacturing plant in Chihuahua, which is key to the company’s North American powertrain supply chain. The facility produces high-tech engines shipped to assembly plants in the U.S., Canada, and other international markets.
Strategic Advantages of Nearshoring to Mexico
The proximity to the U.S. market enables fast delivery and deep integration with American automotive supply chains. This strategic advantage has fueled the rise of high-tech manufacturing hubs like Tijuana. There, mobility startups and electric vehicle component makers are joining established suppliers, taking advantage of the region’s logistical strengths and cross-border connectivity to serve the evolving needs of the industry.
Moreover, Mexico’s extensive trade agreements, most notably the United States-Mexico-Canada Agreement (USMCA), enhance its value proposition by enabling tariff-free access to key global markets. Companies manufacturing in Mexicocan benefit from reduced customs duties, simplified rules of origin for auto parts, and more favorable content requirements. This is particularly attractive as automakers diversify away from distant suppliers and aim to reduce exposure to tariffs on goods imported from Asia and Europe. Mexico’s IMMEX and maquiladora programs further allow manufacturers to temporarily import raw materials and components duty-free, as long as they are re-exported as finished goods, making the country an efficient platform for cross-border trade.
While Mexico’s strengths are clear- cost-effective production, access to the U.S. market, and a maturing industrial ecosystem- several challenges are emerging. Infrastructure constraints, energy reliability, and regulatory complexity remain key concerns. Nonetheless, states are stepping up with targeted investments in industrial park services, customs modernization, and workforce training to keep pace with the sector’s evolving needs.
The shift toward electrification, automation, and sustainability also influences investment decisions. New projects in battery assembly, software integration, and lightweight materials are emerging across the Bajío and northern Mexico, as suppliers and OEMs adapt to changing consumer demand and environmental standards.
Mexico offers a compelling mix of industrial scale and cost efficiency for manufacturers and investors. Its automotive clusters not only support complex trade activity across borders but also help companies manage risk, lower operational costs, and accelerate product delivery to market. As the global auto industry evolves, Mexico is not just keeping up; it is moving into the fast lane.
Discover Mexico’s strategic manufacturing advantages. Contact Tecma’s team of experts today to explore your options.
