The auto parts business is thriving on a global level, so Intran wondered which countries send the most auto parts to the United States. The research company collected data from the Center for Automotive Research and the International Trade Association to build an infographic that breaks down the top importers to the US.
Reviewing the 2016 International Trade Association’s report, Intran agreed with the association’s assessment of Mexico’s auto part manufacturing success. However, the research group says it would like to consider additional factors for why so many auto parts are imported from Mexico to the United States.
- Proximity. U.S. companies can easily visit the neighboring country’s facilities, and shipping from Mexico reduces costs and time.
- Strong trade between neighbors. U.S. exports of auto parts to Mexico is one of the leading sales sectors for the United States.
- Since NAFTA has rules to limit duties or taxes on imported parts from Mexico and Canada, this results in cost savings for U.S. businesses.
- Mexico has Tier 1 suppliers, manufacturers who supply directly to OEMs and Tier 2 suppliers, who supply parts to other automotive companies. The country effectively manufactures electrical components, powertrain parts, and engines.
- Mexico enforces intellectual property laws.
- Mexico has a highly-skilled labor force that generally costs less than U.S.-based workers.
- In addition to engineers, more Mexican workers are learning new skills to keep up with changes in manufacturing.