Mexico Economics Auto industry: Bumpy ride

Research evidence excerpt

Mexico Economics Auto industry: Bumpy ride

11 June 2026

Mexico Economics EconomicsMexico

Auto industry: Bumpy ride

◆ Mexico’s auto sector and its relevance for industrial output are Jose Carlos Sanchez

gaining attention, as USMCA risks matter for long-term trends Chief Economist, Mexico HSBC Mexico, S.A., Institucion de Banca Multiple, Grupo

Financiero HSBC

◆ In Jan-May 2026, production was flat, while exports performed jose.c.sanchez@hsbc.com.mx

+52 55 5721 5623

better and domestic sales grew on the back of higher imports

Prachi Mathur

Associate

◆ We break down metrics that show the sector’s transformation Bangalore

and address key themes ahead of the 16-17 June USMCA talks

Structural strengths, but rising cyclical headwinds

Mexico’s long-standing structural advantages should continue to underpin the sector,

but near-term momentum is being constrained by tariff risks and USMCA uncertainty.

Preferential access to the US will favor further market share gains, we think, but

prospects of tighter rules of origin makes the outlook less clear.

Mexico still faces tariffs on the non-US content of vehicles, while USMCA-compliant

parts can still enter the US tariff-free for now. Mexico’s auto sector faces a higher

headline tariff burden than key competitors (Japan, South Korea), which have

secured a 15% rate vs Mexico’s 25% (with exemptions).

Automotive production, exports, and domestic sales are performing unevenly

In Jan-May 2026, light vehicle production underperformed exports and domestic

sales (see full breakdowns in pages 3 and 4). The latter have been supported by

higher imports. Export resilience is masking weaker production, suggesting inventory

drawdowns that may not be sustainable.

Production was flat in Jan-May 2026, reflecting external pressures from tariffs and