The United States’ new tariff on foreign cars is having an impact on the Mexican automotive industry, official data indicates.
The national statistics agency INEGI reported on Monday that Mexico’s exports of light vehicles declined 2.9% in annual terms in May, the month after the Trump administration imposed a tariff on all foreign cars. Domestic production of cars fell 2% last month, INEGI said.
Mexico exported 1.33 million light vehicles between January and May, the worst annual decline for exports in a five-month period since 2020.
United States content in vehicles made in Mexico is exempt from the 25% tariff the U.S. government imposed on foreign cars in early April, reducing the duty on Mexican cars to an average of 15%, according to Economy Minister Marcelo Ebrard.
Nevertheless, the duty is detrimental to a Mexican automotive industry that had grown accustomed to tariff-free trade in North America thanks to the USMCA and NAFTA. Around 80% of the vehicles Mexico exports go to the United States.
INEGI reported that Mexico exported a total of 301,112 light vehicles last month, while 358,209 vehicles were assembled in the country.
The 2.9% decline in exports and 2% drop in production came after even larger decreases in April. INEGI reported last month that Mexico’s auto exports fell 10.9% annually in April, while production declined 9.1%.
Compared to April, auto exports and production increased in May.
The Mexican Automotive Industry Association noted that last month was in fact the second best May on record for auto production after May of 2024, and the third best May on record for exports.
Auto production and exports fell in the first 5 months of 2025
INEGI also reported that Mexico’s light vehicle exports declined 6.3% annually between January and May to 1.33 million units between January and May. It was the worst annual decline for exports in a five-month period since 2020, when the COVID pandemic and associated restrictions were roiling economies around the world.
In comparison, exports increased 12.1% in the first five months of 2024.
Production of light vehicles in Mexico also declined in the first five months of the year, although the year-over-year drop in output was only 0.5%. The total production of 1.64 million units represented the first annual decline since the first five months of 2020.
Julio Galván, head of economic studies at the National Auto Parts Industry trade association, said that weak demand for new cars in the United States is a contributing factor to the declines in auto exports and production so far this year.
Not all automakers are exporting fewer cars from Mexico
INEGI’s data shows that Volkswagen, Mazda, Mercedes Benz, Stellantis, BMW, Nissan, Audi and General Motors all exported fewer cars from Mexico in the first five months of 2025 than in the same period of last year. Among those automakers, Volkswagen saw the biggest decline in export volumes, shipping 37.6% fewer cars out of Mexico compared to the January-May period of 2024.
Meanwhile, Toyota increased its exports from Mexico by 72% in the period and KIA sent 14% more vehicles out of the country. Ford and Honda also increased their exports in the first five months of the year.
Volkswagen and Stellantis recorded the largest declines in production in Mexico between January and May, with each automaker seeing their output fall by over 20%. In contrast, Toyota’s production increased 63.4% annually in the first five months of the year, INEGI reported.
Sales of new cars in Mexico increased between January and May
INEGI also reported that 593,282 new light vehicles were sold in Mexico in the first five months of the year, an increase of 0.95% compared to the same period of 2024. The figure includes vehicles made in Mexico and imported.
The top selling brands in Mexico between January and May were:
- Nissan: 107,130 units or 18% of the market.
- General Motors: 79,865 units or 13.5% of the market.
- Volkswagen: 54,122 units or 9.1% of the market.
- Toyota: 50,098 units or 8.4% of the market.
- KIA: 43,532 units or 7.3% of the market.
Of those five automakers, General Motors was the only one to record a year-over-year decline in sales in Mexico.
Among the other automakers who saw their sales in Mexico increase in the first five months of the year were Hyundai, BMW, Mazda, Mitsubishi, Great Wall Motor and JAC.
With reports from El Economista and El Financiero
