Mexico set auto production record in 2014

Capitalizing on the growing U.S. economy, Mexico’s automotive industry achieved record production and exports in 2014 and expects output to rise further in 2015.

According to new figures released by the Mexican Automotive Industry Association (MAIA), the auto makers produced more than 3.2 million vehicles, a nearly 10% increase over 2013, and exported 82% of them, overwhelmingly to U.S. consumers. Mexican vehicle shipments to Canada, at 267,000, rose by more than a third last year.

With both existing and new factories ramping up, the MAIA predicted that Mexico could manufacture as many as 3.5 million light vehicles this year. It calculates annual production will total 5 million vehicles by the end of the decade.

“Mexico without doubt has an automotive sector that is a safe bet,” Eduardo Solis, executive president of the MAIA, said at a news conference reported by the Associated Press and other news agencies.

Although Mexico ships vehicles to more than 100 countries, the automotive plants’ fate remains tightly bound to North American markets. The U.S. and Canada together bought four out of every five of the more than 2.6 million vehicles exported last year, Mr. Solis said. And while U.S. auto sales grew nearly 6% in 2014 to 16.4 million vehicles, the market share of Mexican produced vehicles sold north of the border jumped by nearly 14%.

Mexico has experienced an automotive boom through the past decade, with 2014’s production double that of 2005. The growth has accelerated in the past several years and industry and government officials expect it to continue doing so through the end of the decade.

Automaker Nissan, which accounts for about a quarter of Mexico’s total production, increased production at its facility in the central state of Aguascalientes. This past spring, Honda and Mazda began production at plants in neighboring Guanajuato state. Also, Kia Motors is building a plant in the northern city of Monterrey, and an Audi plant is being built southeast of Mexico City. Also, BMW said it intends to produce its own luxury vehicles at factory it is building in north-central San Luis Potosí state by 2018, and Ford, General Motors and Volkswagen are all undertaking multibillion-dollar expansions of their own.