"Companies have seen firsthand during the health crisis the benefit of having a north-south chain. They were able to have greater contact with those countries, there was greater ease in working with those countries, as opposed to those that were more exposed on the east-west supply chain," he said. "In that realignment, Mexico has the most to gain."
This means that Mexico could gain at least some portion of what has been sourced from China in recent years, said Larry Keyler, global automotive sector leader at accounting and consulting firm RSM US. But he does not expect a mass exodus of auto companies out of the Asian workhorse.
Production moves drive up costs and take months, if not years, to implement, he said.
"When you consider the massive investments the OEMs have made in manufacturing on a global basis, and the amount of continued R&D and automation and robotics that are going on, the thought of 'I'm just going to shift my supply chain from Asia to Mexico or somewhere else in the world' doesn't move as swiftly as you might think," Keyler said.
Indeed, despite the changing logistics equation of China, not all companies are interested in taking on the expense of moving elsewhere.
Jacques Aschenbroich, CEO of Valeo, the industry's 10th largest supplier with 2019 sales of $18 billion, told the Aix en Seine economics conference in Paris last month that suppliers likely will relocate only when their customers are ready for them to.
"Our final customers and auto parts clients aren't ready to pay more if our supply chains were relocated," Aschenbroich said. "So if neither of them puts a value on the risk, there is no chance that supply chains will be relocated."