Between Importing and Exporting: Mexico Does Not Substitute Auto Parts, It Needs Them to Export

Domestic auto parts production does not cover internal or export demand; as a result, there is no import substitution. In this framework, Mexico sells to North America, but its supply increasingly depends on Asia.

Hichem Elloumi leads COFICAB, an automotive wiring company, and one of the auto parts firms that absorbed the most industrial space in Q12026. Photo: SiiLA.

By: SiiLA News

04/28/2026

In Mexico, the industrial space occupied by the auto parts subsector does not expand solely based on what the country produces, but on how it is integrated into global production, in a dynamic that does not reflect greater self-sufficiency, but rather a deeper integration in which importing is part of the very act of producing and exporting.

According to SiiLA, companies engaged in the manufacturing of auto parts, bodies, and vehicles—the three segments that make up the automotive sector— are together the largest industrial occupier in the country and represent about a quarter of total occupied space, with 3% growth between the first quarter of 2025 and 2026. However, their market share declined by 100 basis points, indicating their expansion pace was slower than the rest of the market.

A large part of that momentum is explained by the performance of auto parts, which account for around 40% of the value of production and sales in Mexico’s automotive sector and grew at a compound annual rate close to 5% between 2020 and 2025. Growth was concentrated in components such as steering, suspension, and braking systems—with rates of 7% to 9%—while higher-weight segments, such as electrical and electronic equipment and engines and their parts, advanced at a more moderate pace, revealing sustained but uneven expansion.

That trajectory was interrupted at the start of 2026. In the first two months of the year, production and sales fell 8% and 9%, respectively, compared to the same period in 2025, returning to levels similar to those in 2024. The contraction was particularly pronounced in transmission and steering systems, with double-digit declines. At the same time, engines and their parts were the only segment to grow, at 3%, confirming a slowdown across the value chain.

This slowdown is not explained solely by the sector’s internal performance, but also by its link to the auto parts trade, where the surplus does not—on its own—reflect the underlying dynamics.

After a period of deficit from 2010 to 2014, Mexico’s auto parts trade balance reversed, reaching a peak of $8.5 billion in 2022, reflecting sustained export growth. However, that progress has not reduced external dependence. In 2006, Mexico imported about 58 cents for every dollar exported. Today, that figure stands at 80 cents and has not improved since 2023.

Over the past 20 years, Mexico has imported an average of 85 cents per dollar of auto parts exports.

The link between production and trade confirms this pattern. While auto parts production grew at an annual rate of 5% between 2020 and 2025, exports grew at a faster pace (7%), creating a positive gap. That difference is sustained by imports, which also grew consistently (6% annually) and remain at elevated levels.

In fact, over the past two decades, imports and exports have moved in tandem, confirming that export growth systematically relies on imported inputs, even with year-to-year fluctuations. The result is a model in which export growth does not reduce external dependence; rather, it incorporates it as an operating condition, in line with increasingly deep integration into global value chains. This implies that Mexico imports more as it exports more.

Annual changes in exports and imports in Mexico tend to move together.

This integration is reflected in both volumes and the organization of the supply chain.

Beyond a snapshot, the shift is evident in the regional trajectory: between 2014 and 2024, North America’s share of imports declined from around 68% to about 57%, Asia’s share increased from 21% to 28%, and Europe’s rose from about 10% to just under 14%. By contrast, exports remain above 90% concentrated in North America and have become even more regionally focused.

This reconfiguration is also visible at the country level. The United States accounts for approximately 91% of Mexico’s auto parts exports and just over half of its imports, while China remains the second-largest supplier, with a share close to 14%. Together, the top five countries—the United States, China, Germany, Japan, and Canada—account for more than 80% of imports.

The pattern is clear: demand remains anchored in North America, but the supply base has gradually shifted toward Asia. In this balance, Mexico neither replaces its suppliers nor reduces its external exposure. It operates as a node within a broader production network, where growth does not eliminate dependence, but reorganizes it.

Ultimately, this means that demand for industrial space is driven not only by local production volumes but also by the structure of that network. To explore these patterns further, visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.

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