MEXICO CITY -- Light-vehicle production in Mexico is on course to grow at least 22 percent to 1.8 million cars and trucks this year after plummeting 28 percent to 1.5 million in 2009, the country's supplier association says.
Auto parts output also will rise, but the long-term outlook for parts manufacturing is cloudy in the wake of a sharp slowdown in foreign investment.
The association, Industria Nacional de Autopartes, forecasts a 9 percent growth in vehicle assembly in 2011 to 2.1 million, the association's executive president, Agustin Rios, said here last month at an industry conference.
Rios told the conference, which was organized by the Mexican magazine Mexico Now, that auto parts production, which fell 29 percent to 41.2 million units in 2009, is likely to rebound 33 percent to 55 million this year, then rise 3 percent in 2011 to 57.1 million. He expects foreign direct investment in light-vehicle assembly in Mexico to surge to $683 million this year, from $421 million in 2009 and $97 million in 2008. Each of the five largest foreign automakers operating in Mexico -- Volkswagen AG, Nissan Motor Co., Ford Motor Co., General Motors Co. and Chrysler Group -- plans to increase spending this year.
But Rios' data showed foreign direct investment in auto parts production declining to $248 million this year, from $868 million in 2009 and $1.08 billion in 2008.
In the past five years, foreign direct investment in vehicle assembly in Mexico totaled $1.78 billion. Investment in auto parts production totaled $7.75 billion, Rios said.
Mexico has 15 light-vehicle manufacturers, all foreign enterprises, and 1,500 parts manufacturers, 80 percent of which are foreign-owned and 380 of which are Tier 1 suppliers.