Mexican auto suppliers strategize for NAFTA talks

MEXICO CITY — President Donald Trump has made an example out of global automakers that produce in Mexico for the U.S. But auto parts makers south of the border also have a huge financial stake in the upcoming trade talks.

Suppliers here are maintaining a united front with the Mexican auto industry, but the parts community also has strategies for a favorable revision of the North American Free Trade Agreement, industry officials said at a conference here this month.

"The auto parts industry that exports to the U.S. is bigger in terms of sales than all the autos and all the heavy trucks that we sell to the U.S.”, said Oscar Albin, executive president of Mexico's National Auto Parts Manufacturing Association.

In raw numbers, he said, auto parts exports to the U.S. last year were worth about $63 billion vs. $42 billion for light vehicles and $7.5 billion for heavy trucks. About 80 percent of the $80 billion Mexican parts industry's output ends up at U.S. auto factories, while only about 12 percent is sold at home, according to figures from Albin's industry group.

One possible way to expand the pie for North American players, Albin suggested, is finding ways to reduce the participation of supplier nations that contribute little to the NAFTA bloc.

For example, North American countries imported about $78 billion in auto parts last year from China, Japan, Germany and South Korea. Because Japanese, German and Korean automakers make cars in the region, those imports are understandable, Albin said.

It's harder to justify the $30 billion of imported Chinese parts, Albin said. Replacing some of those imports could be an opportunity to create jobs in North America, he said.




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