For as challenging as 2020 was, there is a light of prosperity for the Mexican industrial sector in 2021 projections. Industries such as automotive and manufacturing are projected to have a resurgence this year, giving hope for a greater economic growth.
There is great hope for the industrial sector in Mexico in 2021 projections as it starts to recover from the pandemic
President of the Commission of Economic Studies of the Confederation of Industrial Chambers (CONCAMIN), José Luis de la Cruz, estimated that the Mexican economy will grow between 3.5% and 4.2% in 2021. Furthermore, he added that the country’s GDP could grow at a rate of 4.0% this year.
“Industrial sector in Mexico will be one of the elements that can contribute to economic growth. But the manufacturing sector and our ties with the United States of America are fundamental, as is being able to foresee where the market dispute between the US and China is going. This is because our manufacturing industry is involved in it,” stated de la Cruz.
Nevertheless, general industrial production has a projection of 6.8% yearly increase for 2021. Moreover, some industrial sectors in Mexico are bound to regain strength, such as the automotive industry and electronics, amongst others.
Reaching pre pandemic levels thanks to external demand
It is projected that the automotive industry will produce around 3.4 million units, will export 3 million and sell approximately 1 million new motor vehicles. This industrial sector’s optimism is such that they are estimating a rebound in the double digit growth in respect to 2020.
Mexico has the capacity to assemble up to five million vehicles, but during 2020 production plants worked at 55% capacity.
“During December we had an occupation of around 66%. We are getting back, little by little, to what we had before the pandemic thanks to the external demand,” stated Fausto Cuevas, director of Mexican Association of the Automotive Industry (AMIA).
Vehicle manufacturers expect a 12% increase in vehicle production and exportation for 2021. Furthermore, auto parts producers have an even better projection. They estimate that they will experience a 24% increase in production value, which is equivalent to $97,000 million USD.
“We are hoping that three factors will allow us to regain the manufacturing volume we had before the pandemic: a greater demand for spare parts for the maintenance of the vehicle fleet, the USMCA and its enforcement on higher use of regional material, and the rebound of the American market,” stated Oscar Albín, president of the National Autoparts Industry (INA).
The automotive industry is also expecting a growth in sales. They project to have an 11% increase in sales compared to 2020, which translates to 949,000 units.
“We are expecting for 2021 a volume that, while it won’t be that of 2019 when 1.3 million units were sold, will allow the companies in our sector to stay financially stable and healthy and reduce uncertainty,” stated Guillermo Rosales, Deputy General Director of the Mexican Association of Automotive Distributors (AMDA).
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Sources: Expansión, El Economista, Transporte y Turismo