Mexico's car exports experienced their largest decline since the beginning of the year in September, according to data from the Mexican National Institute of Statistics and Geography (INEGI). The 12% drop in exports compared to the same month last year was attributed to the impact of US trade policies on Mexico's automotive sector. The decline was the largest since December 2025, and monthly production fell by 15%.
Despite the decline in exports, domestic car sales in Mexico increased by 8% in September, helping to mitigate the effects of weak external demand on the manufacturing sector. The data comes as the US, Mexico, and Canada review their free trade agreement, with Mexican cars still facing US tariffs of up to 25%. Mexican officials estimate that complying with origin rules requiring North American-made components would reduce the actual tariff burden to 10-12%.
The Mexican and US economies are closely linked after over three decades of free trade agreements, but shifts in US trade policies and tariffs under President Donald Trump have created uncertainty among companies and affected long-standing supply chains. According to Janet Kirou, an economist at Monex, this uncertainty has influenced car manufacturers' production and export decisions. She warned that Mexico's reliance on the US market poses significant risks to the sector.
Major car manufacturers, including General Motors, Ford, and Nissan, reported notable declines in exports in September. General Motors announced a $4 billion investment plan last year to move some production from Mexico to the US in response to trade policy disruptions. In contrast, companies like Kia, BMW, and Mazda increased their monthly exports by more than half.
The Mexican Automobile Industry Association (AMIA) stated that Mexico remains the largest foreign supplier of cars to the US market, accounting for 16% of the light vehicle market. Despite a 2% decline in the US market since the beginning of the year, Mexican car exports to the US fell by 5% in the first nine months of 2026.
Analyst Alejandra Vargas from VB Mas warned that continued slowdown could affect car manufacturers' decisions on new investments, industrial activity, and Mexico's economic growth. She emphasized that developments in trade relations between Mexico and the US will remain crucial in determining the Mexican automotive industry's trajectory in the coming months.
The ongoing review of the trade agreement and US tariffs will likely continue to impact Mexico's automotive sector. Key players in the industry are closely monitoring the situation, and any changes to trade policies could have significant implications for Mexico's economy.
Key points
- Mexican car exports declined 12% in September due to US tariffs.
- Domestic car sales in Mexico increased by 8% in September.
- Mexico remains the largest foreign supplier of cars to the US market.
