Mexico nearshoring keeps growing

Washington is digging deeper into where North American cars and parts are actually made as Mexico’s auto supply chain keeps expanding. (federalregister.gov) The United States International Trade Commission published a notice on April 10 seeking comments on a draft motor vehicle producer questionnaire for its 2027 report on United States-Mexico-Canada Agreement automotive rules of origin. The agency said the law requires five biennial reports on the rules’ economic impact, effect on United States competitiveness and relevance as technology changes. (federalregister.gov) Those rules decide whether a vehicle qualifies for duty-free treatment by setting how much of it must come from North America. The trade pact took effect on July 1, 2020, and its first joint review is scheduled to begin on July 1, 2026. (ustr.gov 1) (ustr.gov 2) Mexico’s parts makers are growing while that review machinery spins up. January 2026 auto-parts output reached $10.01 billion, up 9.35% from a year earlier, according to industry data reported after the AMDA-AMIA-INA joint conference. (mexicobusiness.news) The growth is concentrated in the categories that feed newer vehicle platforms. Electrical components were 19.4% of January output at $1.93 billion, while transmissions and clutches posted the fastest growth at 16.31%; gasoline engines fell 50.78% to $641 million. (mexicobusiness.news) Geography matters here too. The Bajio region produced 36.1% of Mexico’s January auto parts output and grew 10.61% year over year, faster than northern Mexico’s 8.59%, with Queretaro among the states contributing between $725 million and $834 million. (mexicobusiness.news) The United States still anchors the business. Mexico exported $8.79 billion in auto parts in January, and 87% of those shipments went to the United States; Mexico’s share of United States auto-parts imports rose to 43.9% from 42.15% a year earlier. (mexicobusiness.news) Industry groups have been framing that expansion as a nearshoring story for more than a year. The National Auto Parts Industry Association said in January 2025 that United States-Mexico-Canada Agreement rules, nearshoring and foreign direct investment were the main drivers behind projected sector growth, with 87% of Mexican auto-parts production destined for export. (ina.com.mx) There are limits to the boom. El Economista reported in January that the association expected auto-parts foreign direct investment to recover in 2026, but estimated 2025 inflows at about $2.2 billion, below 2024’s $2.467 billion, even as plant expansions continued to meet United States demand. (eleconomista.com.mx) So the picture heading into the 2026 review is two-track: Mexico is shipping more parts into the North American system, and United States agencies are asking for more detailed evidence about how much of that system is truly regional. The next formal checkpoint is the Commission’s 2027 report. (federalregister.gov)