Mexico Auto Output Falls as US Tariff Risks Weigh

Mexico’s light vehicle production fell 17.7% year-on-year to 302,803 units in October 2026, down from 367,928 a year earlier, marking the steepest monthly decline since 2021. The contraction was attributed largely to weaker US demand, alongside the impact of tariffs on Mexican-made vehicles entering the US and the removal of incentives for electric cars. Several major automakers reported significant drops in output, led by General Motors, whose production fell 45.5% compared with October 2025. Stellantis recorded a 37.4% decline, while BMW Group and Nissan saw decreases of 17.4% and 16.4%, respectively. Kia’s production was down a more modest 2.8%. The weakness also affected cumulative performance, with Mexico assembling 3.25 million vehicles between January and October 2026, a 3.9% decrease from the 3.39 million units produced over the same period last year.

Mexico’s car production fell 15.1% year-on-year to 301,803 units in September 2026, following a 1.4% decline in August. The result reflected continued uncertainty in the auto sector as changing US trade policies clouded manufacturers’ production plans. The Trump administration imposed tariffs on multiple trading partners, including Mexico, while the US and Mexico continue bilateral trade negotiations. The USMCA remains in force following its 2026 joint review, despite unresolved issues that could lead to significant changes. Output fell sharply at Mercedes-Benz (-100%), Acura (-48.8%), General Motors (-27.1%) and Nissan (-26.3%).

Mexico's car production fell 1.4% year-on-year to 344,940 units in August 2026, following a 2.2% decline in July. The result reflected continued uncertainty in the auto sector as changing US trade policies clouded manufacturers' production plans. US President Trump in his second term imposed a series of tariffs on multiple countries, including Mexico. While the Trump administration decided not to renew the USMCA, the agreement will remain in force for another decade unless a member withdraws, with annual reviews that could lead to significant changes. The US and Mexico also continue bilateral trade negotiations. Output declined sharply at Mercedes (-99%), Nissan (-26%) and Ford Motor (-25.7%), as well as Stellantis (-3.8%) and Toyota (-3%). Meanwhile, production rose sharply for BMW Group by 359%.