While some automakers with operations in Mexico will have to work their way through in order to meet the criteria emerged from the new trade deal between the United States, Mexico and Canada (USMCA), most of the vehicles that are shipped to the U.S. and further North already comply with such rules.
During the Mexico’s Auto Industry Summit hosted by MexicoNOW in Monterrey, Nuevo Leon, Eduardo Solis, Executive President of the Mexican Automotive Industry Association (AMIA), revealed that 70% of the vehicles built in Mexico for exports markets already “meet the new criteria of regional value content”, including all pickup trucks, although some of the brands who do not comply are going to have a hard time to do so.
Solis also clarified that the quota for the export of cars will only apply if the US government decides, based on section 232 of the Trade Expansion Act of 1962, to impose tariffs on imported vehicles. “As long as the vehicles meet USMCA specifications, there is no quota for export,” he said.
Meanwhile, in the panel “Outlook for the Competitiveness of the Automotive Industry in Mexico”, Jun Umemura, Vice President of Toyota Motor North America, said he was confident of the outcome regarding the new trade deal. “USMCA is better than nothing”, he said, while pointing out that uncertainty diminished once the deal was reached.
Toyota operates an assembly facility in Tijuana with an annual output capacity of 160,000 Tacoma pickup trucks and builds 40,000 Yaris sedans at a manufacturing plant owned by Mazda in Salamanca, Guanajuato. Also, the Japanese automaker currently builds an assembly plant in Apaseo el Grande, Guanajuato to expand the production capacity of Tacoma mid-size trucks.
At the same panel, Thomas Karig, founder of Tkonsult consultancy firm, said the auto industry in Mexico will keep growing, but in a slower pace than it has been in last three years.
“The USMCA will not change the activity of the companies already here. Mexico has free trade agreements and that has a positive impact. From Mexico, you can export vehicles, not only to North America, but also to other markets such as the European,” Mr. Karig added.