The Transformation of the Automotive Industry. The Development of the Mexican Automotive Industry in the context of globalization and regionalization

The automotive sector in Mexico has played a fundamental role in the industrial development. In a few decades, it has gone from a minority role on the international scene to becoming one of the largest producers of automobiles and their parts worldwide. This is the culmination of an integration process that has profoundly transformed the structure of the Mexican automotive industry, deepening its dependence on the centre, the North American market. The Mexican experience can be located within a broader context of “integrated peripheries” whose development cannot be explained separately from what happened in the central countries. Unlike the traditional analysis of the centre-periphery relationship, this work highlights the differences between the different commercial blocks and their respective centres and how the transformations the industry has undergone in the world have conditioned its evolution in the integrated peripheries. Although there is no doubt that development in the United States has contributed to the spectacular growth of the automotive industry in Mexico, it is worth asking whether it has strengthened it or whether this dependence has made it more vulnerable. The analysis presented in this document is based on the causes that led to the abandonment of the import substitution industrialization strategy and to the integration into the North American Free Trade Agreement (NAFTA), its incorporation into the integrated periphery and the changes that have occurred in the geography of international trade in vehicles and their parts, identifying the different groups of countries and their respective participation in international trade networks. We also measure each block's relative importance, the interconnections between them, and the specific contribution of the countries that comprise them. The global automotive industry is again going through changes that will affect the entire supply chain and potentially modify the frontier of the sector, impacting the relative advantages of countries and regions and modifying the geography of the industry. Among the changes currently taking place are the end of NAFTA and its replacement with the USMCA, the entry of powerful competitors in global markets and the transition to electrified mobility, autonomous driving vehicles, the connection to digital networks and new modalities of shared use. A new social and technological atmosphere with environmental demands is redefining the characteristics of an already saturated market that offers challenges and opportunities for everyone.