Over the last three decades, Mexico has cemented itself as a powerhouse in automotive manufacturing. With a strategic location, a skilled workforce, and cost advantages, it has become the 7th largest vehicle producer in the world and the top supplier of auto parts to the U.S.. But more than just an assembly hub, manufacturing in Mexico is deeply integrated into North America’s supply chain, making it a key player as automakers shift toward electrification and nearshoring.
Mexico’s tiered supply chain system is one of its greatest strengths. The country hosts:
This robust ecosystem ensures seamless integration into global supply chains, enhancing cost efficiency and just-in-time production.
Mexico is the 4th largest producer of autoparts in the world, and the 1st to the United States. More than half of the imported autoparts to Mexico are destined to compliment the local manufacturing lines. Much of this is then exported back to its original country. The primary countries of origin include the United States, China, Germany and Japan.
As automakers pivot toward electrification, Mexico is emerging as a strategic hub for EV production and battery supply chains. In 2024 alone:
The shift to EVs isn’t just about changing vehicle designs—it’s about transforming entire supply chains. Manufacturing in Mexico stands to benefit significantly, as the country offers a strong industrial base, cost-effective production, and proximity to the U.S. market. However, the transition also brings challenges. OEMs and suppliers must secure reliable sources for battery minerals, expand battery production capacity, and build a network of specialized suppliers that meet the evolving demands of electrification. Additionally, staying compliant with USMCA trade rules will be essential to maximizing incentives and maintaining cost advantages.
Explore more data and insights in the Electromobility E-Book.
The United States-Mexico-Canada Agreement (USMCA) has redefined trade dynamics, making Mexico even more attractive for nearshoring strategies:
As the 2026 USMCA review approaches, manufacturers must stay ahead of potential regulatory shifts.
Mexico’s automotive clusters provide world-class infrastructure, supplier networks, and skilled labor pools. The most prominent regions include:
Mexico’s strategic advantages, world-class workforce, and trade-friendly policies make it an indispensable hub for OEMs, suppliers, and investors looking to optimize their global operations.
Need expert guidance on site selection, supply chain management, or investment strategy? Our team has helped hundreds of manufacturers establish operations in Mexico.