Chinese Imports and their Impact on the Spare Auto Parts Market in Mexico
Lourdes Álvarez and Liliana Cuadros
Mexico's automotive industry and Chinese imports ( ...continuation )

Given this panorama, the United States has remained our main trade partner in the automotive-auto parts chain (AAC),4 but its participation in Mexico's total imports has been diminishing, dropping from 75% to 49%, in the period from 1995 to 2009. China, for its part, became Mexico's second most important trade partner in 2008, participating with 9.68% of Mexico's imports, a figure that increased to 11.94% in 2009. In addition, 82% of Mexico's exports in the AAC are sent to the United States, and only 0.40% to China. Even so, the latter experienced a growth rate of 54% between 1995 and 2009, increasing from 20 to 140 million dollars (Dussel, 2010b).

Among the main auto parts that Mexico imports from China are mechanical parts for vehicles, tires, storage batteries, car seats, starters, transmission shafts and bearings.5 If we analyze Chapter 87 on customs tariffs in the harmonized system, for “motor vehicles, tractors, cycles and other land vehicles; parts and accessories,” we can observe that Mexico's exports to China grew at a weighted average rate (war) of 53.73%, while imports grew at a lower rate (26.55%). Nevertheless, the trade balance for this chapter has been negative over the last decade. Mexican exports increased as a result of the growth in vehicle production in China, tripling between 2009 and 2010, while imports dropped in 2009 due to the impact from the economic crisis and the decrease in Mexico's auto production, but they recuperated in 2010 (Table 2). In fact 15% of Mexico's Chapter 87 imports come from China, while only 0.30% of China's Chapter 87 imports come from Mexico (ComTrade map, 2011)

During the last decade, Mexico's auto parts imports from China were 2.6 times more than exports, while in contrast, China's auto parts imports from Mexico did not represent even 1% of its total. This tells us that there are lost opportunities in this area. Still, it is necessary to remember that a third of the auto parts manufacturing sector is made up of multinational corporations, and their production is limited to product portfolios that complement each other more than compete with others, although sometimes the latter does occur. These corporations prioritize intra-firm trade, and exports to China are not always necessary, since they produce in that country.

4 The automotive-auto parts chain is a set of sub-headings selected by the author from all the customs tariff chapters. In this analysis the aggregate total consists of 129 sub-headings: 112 auto parts, and 17 automotive.

5 ComTrade map,, consulted September 19, 2011. Includes motorcycle parts.