SD Source Confirms Recent Trend of “Hecho En Mexico”

Longtime silverbug and SD member (who personally asked us if he could remain anonymous) living on the border and working for a global manufacturer of wiring harnesses confirms: “It’s not just cars they’re moving, it’s everything”. One-offs and cherry picked data can be coincidence, but as more companies head south of the border, coincidence becomes a trend, and that trend is is hard to buck once it starts.

Editor’s Note: The anonymous source works for a global manufacturer of wiring harnesses. The firm is headquartered in Europe, and has operations in Europe, Asia, North and South America.  The vibe is that the factory may be moved south of the border altogether as the company is in the middle of opening up a brand new production facility in the state of Guanajuato (250 Miles North of Mexico City).

From ZeroHedge

Hecho En Mexico: 2017 Auto Production In Mexico Surges Despite Trump Attacks

Earlier this year, before then President-elect Trump even moved into the White House, he picked several very public fights with auto manufacturers over their increasing reliance on Mexico for incremental production volumes.

In a January 3rd tweet, the President-elect said “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!”

Then, on the same day, Trump took a victory lap after apparently convincing Ford to walk away from a new $1.6 billion production facility in Mexico.  Of course, we’ve since noted that the production volume intended for that abandoned Mexico facility has instead been shifted to China…but who can keep track (see: Remember When Ford ‘Cancelled’ That Plant In Mexico? Well, They’ve Just Moved It To China).

Meanwhile, it wasn’t just the domestic manufacturers that were targeted by the incoming administration as Toyota’s stock also took a tumble on the following tweet:

Ironically, despite all the grandstanding and victory laps designed to appease the United Auto Workers that showed up ‘bigly’ to support Trump’s campaign, light auto production in Mexico has surged so far in 2017.  Per the chart below from Wards, Mexico’s share of NAFTA auto production has surged to 21.5% so far in 2017, up from 19.5% in 2016 and a recent low of 18.1% in 2013.  Per the Wall Street Journal:

A move by auto makers to produce some popular sport-utility models in Mexican factories helped spur a 16% increase in production of light vehicles in Mexico during the first six months of the year compared with the same period in 2016. At the same time, tepid sales of sedans held down production in the U.S. and Canada, according to new data posted by

The data indicates one in five cars built in the North American Free Trade Agreement zone comes from Mexico, including hot new products from General Motors Co. and Fiat Chrysler Automobiles NV. That is up from the industry’s reliance on Mexico during the financial crisis, when the U.S. car business received billions of dollars in bailouts aimed at preserving jobs and keeping domestic players afloat.

Separate U.S. trade data shows that the value of light-vehicle imports from Mexico to the U.S. ballooned 40% through May.

Mexico Autos


Of course, in the end, Mexico is simply capturing a higher share of overall shrinking production volumes…not terribly surprising given their position as the lowest cost producer in North America. The latest data from Wards Auto shows that U.S. light-vehicle manufacturing fell 5% during the first six months of this year from a year earlier, as auto makers shed workers or scheduled significant downtime to counter a slowdown in demand for sedans. A substantial chunk of America’s automotive manufacturing footprint is devoted to production of family cars or compact cars, which aren’t faring well as gasoline prices remain low and sport-utility vehicles grow in popularity.

All of which just proves once again that while rhetoric and hype can be fun to observe, math, as we like to say, always wins in the end.