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Changing distribution and composition of Mexico's vehicle exports
Submitted by Thomas Klier, Federal Reserve Bank of Chicago on 23 févr. 2016 - 19:35
Type de publication:Conference Paper
Source:Gerpisa colloquium, Puebla (2016)
Mots-clés:Mexico, vehicle exports
Mexico has become one of the world’s leading exporters of vehicles, as the export share of its light vehicle production has expanded dramatically from less than 20 percent in 1985 to over 70 percent today. This paper documents changes between 2005 and 2014 in the volume of exports from Mexico, the destination of the exported vehicles, and the types of vehicles exported. Information in this paper is derived from several sources of data concerning the volume of each vehicle model produced at Mexico’s assembly plants annually between 2005 and 2014, as well as the number of each individual model exported annually to a particular country.
From Mexico’s perspective, two factors underlie the changing structure of vehicle exports. First, Mexico’s production facilities have become integrated with those of its North American neighbors as part of an enlarged production space. Labor costs may be lower in Mexico than in the U.S. or Canada, but transportation costs to those two markets are higher. Second, trade policies have made Mexico one of the world’s leading exporters of vehicles. Exports are increasing relatively rapidly to regions other than North America.
The principal findings of this analysis include:
• Exports of vehicles from Mexico more than doubled between 2005 and 2014, from 1.2 million to 2.6 million.
• The share of Mexico’s vehicle production that was exported increased from 74 percent in 2005 to 82 percent in 2014; conversely, the share of production for domestic sales decreased during the decade from 26 percent to 18 percent.
• Exports to the rest of North America (the United States and Canada) increased from 940,000 in 2005 to 1.9 million in 2014. However, North America accounted for a decreasing share of Mexico’s exports during the decade, from 90 percent in 2005 (excluding unknown destinations) to 66 percent in 2012, although the North American share did increase to 72 percent in 2014.
• The trade balance between Mexico and the United States has widened during the past decade. In 2005, Mexico exported 701,000 more vehicles to the United States than it imported from the United States (879,000 vehicles were exported from Mexico to the United States compared with 178,000 exported from the United States to Mexico). In 2014, Mexico’s surplus with the United States increased to 1.5 million vehicles, with 1.7 million exported from Mexico to the United States and 157,000 exported from the United States to Mexico.
• The principal region of an increasing share of exports was South America. Exports to South America increased from 3 percent in 2005 to 16 percent in 2012, before declining to 10 percent in 2014. The number of vehicles exported to South America increased from 31,000 in 2005 to 368,000 in 2012, before declining to 250,000 in 2014.
• China also received an increased share of Mexico’s vehicle exports, increasing from 0.1 percent in 2005 to 2.9 percent in 2014. Only 761 vehicles were exported from Mexico to China in 2005, compared to 76,000 in 2014.
• The major carmakers display different regional patterns. Renault-Nissan has a relatively high percentage of vehicles remaining in Mexico. Ford and FCA have relatively high percentages exported to the United States and Canada. VW exports a relatively high percentage to Europe and to the rest of the world (Middle East, South Asia, and Japan/Korea). FCA, GM, and VW account for virtually all exports to China, and FCA and VW account for virtually all exports to Europe.