Dept for International Trade

Why Mexico is a great market for UK Automotive and Advanced Engineering Companies

By Alejandra Rodriguez, Head of Automotive and Advanced Engineering DIT Monterrey

A snapshot of the industry and Reasons to Export

Mexico is hardly a newcomer to manufacturing. The country is a leading force in the manufacturing of different industrial sectors such as automotive, aerospace, electronics, home appliances and medical devices, among other sectors. These industries have become part of the economy over the years and have excelled due to exceptional conditions within the market — 12 free trade agreements with over 46 countries, Mexico serves as an export platform to its U.S. neighbour and the world.

Other benefits include the country’s geopolitical advantage, like sharing its borders with the biggest market in the world, the U.S, and having close access to the Central and South American markets. It also offers a capable workforce, with a strong and diverse network of automotive and advance engineering organisations, both in the public and private sectors that provide a diverse range of business opportunities for UK companies.

Mexico as a crucial hub for the Automotive and Advanced Engineering sectors

As a manufacturing hub due to its strategic position in the world, Mexico has not only become an automotive springboard to other markets in the region but also has hundreds of manufacturing plants for medical devices, aerospace, domestic appliances, electronics, among other sectors. It is an important market for the Advanced Engineering sector as machinery for any manufacturing process represents one of the key business opportunities for UK companies; and for the Automotive sector, almost 4 million cars are produced annually in the country, placing it as the 6th largest producer of vehicles in the world and the largest in Latin America .

Mexico’s Automotive Industry

From 2008 to 2018, the automotive industry cemented its position as the most important sector in the Mexican economy. It represents 3.7% of the country’s total GDP and 20.7% of the manufacturing sector’s GDP. In 2018 alone, one in every 25 vehicles sold around the world were assembled in Mexico .

The entry of brands such as Audi, BMW and Infinity in the Mexican market has shifted the share of premium vehicles produced in the country from 4% to 10%. Even though the growth of the automotive industry in the country is driven by a stronger U.S. domestic market, it is now more than ever diversifying its exports markets.

Mexico has abundant expertise in three areas: heavy vehicles, light vehicles and auto-parts. It has over 30 Automotive Original Equipment Manufacturers (OEMs), including over 20 light vehicle and over 10 heavy vehicle plants. There are over 600 Tier 1 suppliers established in the country, and over 2,500 companies producing auto-parts, which makes it the fifth largest producer of auto-parts in the world . And, undoubtedly, the United States-Mexico-Canada Agreement (USMCA) brings more opportunities for local manufacturing in the region.

Opportunities for UK expertise in Advanced Engineering

Due to the importance of the manufacturing industry, the development of technology and enhancement of production processes is a key factor within the Automotive and Advanced Engineering sectors.

Mexico imports over 70% of machinery used for the manufacturing industries. There are over USD $50 bn imports just in the auto parts markets, machine tools and other manufacturing technologies, with the US holding approximately 80% of the market share.

C19 has represented a “wake up” call for the Industry 4.0 to generate more flexible production systems and a more digital mind-set. New opportunities will emerge in sub-sectors such as digitalisation of industrial processes, robotics, smart technologies and clean tech.

This creates an area of opportunity for UK expertise to provide solutions within the auto supply chain, specifically with companies within the Tier 2 and Tier 3 levels. The UK offer of clean and sustainable technology provide innovative solutions that differentiate them from other competitors and is becoming of great importance within the Mexican market.

Outward Direct Investment

Recent investments by automakers and new OEMs have increased business opportunities throughout the country and have attracted Tier 1–2 supplier bases. The new USMCA treaty presents great opportunities to increase investments in North America’s automotive sector, as automakers will be inclined to source locally produced parts to qualify for zero tariffs. There will also be a growing move into low carbon vehicles for local production and for opportunities with Mexican Tiers 1–2 manufacturing companies of automotive components, looking for international partners to develop new products or invest in tech start-ups. Opportunities range from electric motors and electric batteries to lightweight materials and solutions, among others.

Support for UK companies

In my job as Head of the Automotive and Advanced Engineering in Mexico for the UK Department of International Trade (DIT), I am all too familiar with the challenges UK companies face and some of the recurring anxieties about taking a chance on expanding globally. However, the support is there for those who need it.

Over my years in DIT, the support provided to companies has developed and changed depending their needs and goals within the market, maintaining high quality standards throughout the process. Our support is tailored to each company we work with and we are willing to support all types of companies interested in exploring the Mexican market.

DIT is continuously working to link UK companies to potential customers in the region. One example of a successful partnership is with EMCO Wheaton UK, manufacturers of fluid handling systems and equipment (i.e. chemicals). They have long been present in Mexico and with the help and expertise from DIT, they have been able to expand their business further and look for other applications.

Their International Sales Manager, Arancha Salgado, has shared with us her experience in entering the Mexican market:

“EMCO UK saw the potential in Mexico, which is a growing market in terms of new developments and innovation and understood we would be able to address it. With that, we mapped out the stakeholders we needed to engage, set up clear objectives and a plan to start doing business.

It was really important to understand that things take time, as imports/exports are complex and need to be looked at carefully.

It is essential for the exporter to understand the business culture in market, and find the ideal partner who can support locally.

We looked for the help of specialists on the ground and we found the support of the DIT team in Mexico. They have been very supportive providing contacts when needed, data for the industry in order to approach another customer that we were not aware of, as well as, advice and contacts for importation purpose.

We have experienced fast growth in the recent years and believe the market has still a lot of room for UK expertise and innovation.”

EMCO UK is just one of many UK companies in the sector to which DIT has given constant tailored support in the market, which includes verification of local potential clients and contacts, virtual introductions to potential clients, market barriers advice and guidance as well as current support within the Chemicals/manufacturing sector.

DIT can provide a professional view of the market and opportunities available that will give you the necessary tools to make informed decisions on the best path for expansion for your company.

Whether you are interested in Mexico or one of the other fast-growing markets in Latin America and the Caribbean, I urge companies to take advantage of the assistance DIT can provide.


[1] AMIA (2020). Mexican Automotive Industry Association. 

[2] INA (2020). National Auto-parts Industry

[3] AMIA (2020). Mexican Automotive Industry Association. 

· ANPACT (2020). 

· International Trade Administration (2020). Automotive Industry. 

· Insights Tetakawi (2019). Overview of the Automotive Industry in Mexico.