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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2012-2016 global auto parts supporting supplier profiles

From the ranking point of view, nearly five years, Bosch proudly topped the list for five consecutive years, while the Denso Group due to supporting revenue fell nearly 10% in 2015 surpassed by Magna and the mainland, down to the fourth. In contrast, Magna Group has been in the fourth position in 2012-2013, but in 2014 it surpassed the Continental Group and became the third, even rose to the second place in 2015. Meanwhile the Continental Group was wandering back and forth between the third and fourth place.

The ZF Group, which has been ranked ninth from 2012 to 2015, jumped to the fifth place after acquiring TRW in 2016. Valeo ranked 15^th in 2013 and 10^th in 2015, and has been maintained until 2016.

In addition, Yazaki dropped from 10^th place in 2013 to 13^th and 14^th place. BASF also had a big falling from 15^th in 2012 to 19^th place.

Apart from that, the ranks for many other companies didn’t change much. Such as Modern Mobis, Aisin Seiki, Faurecia, Johnson Controls, Lear, Delphi. TRW was acquired by ZF in 2016 so it wasn’t in the rankings.

According to statistics, nearly five years, Germany, Japan and the United States has been among the top 100 enterprises accounted for nearly 70% of the seats, while France, South Korea, Spain and Canada respectively has 3 to 5 companies to be in the finalists.

But with Donald Trump being America’s president, will the import and export strategies change for auto industry? Let’s wait and see what happens.

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