Despite Trump threats, vehicle imports from Mexico hit an all-time high

General Motors vehicles are driven up the ramp to a cargo ship at the Port of Veracruz in Veracruz, Mexico.

Susana Gonzalez | Bloomberg | Getty Images
General Motors vehicles are driven up the ramp to a cargo ship at the Port of Veracruz in Veracruz, Mexico.

President Donald Trump may not like it, but vehicles imported to the United States from Mexico have climbed to an all-time high during the first year of his administration.

New data from Mexico’s auto industry show the country exported 2.33 million vehicles to the U.S in 2017, an increase of 9.4 percent. In addition, 75 percent of the vehicles exported from Mexico wound up being sold in the U.S., far outpacing the next most popular destination, Canada, which received just more than 8 percent of the vehicles shipped out of Mexico.

The numbers show automakers are not slowing down final production at plants in Mexico, despite threats from the Trump administration to rip up or significantly rework the North American Free Trade Agreement, also known as NAFTA. Trump warned the U.S. could impose a “big border tax” on cars produced outside the U.S.

While campaigning for the presidency, Trump blasted automakers such as Ford for importing so many vehicles from Mexico. Trump sent out tweets attacking Toyota and General Motors for importing vehicles made in Mexico, but his most vociferous Twitter rants were aimed at Ford.

During the campaign, Trump routinely bashed Ford for planning to open a new final assembly plant in Mexico. Shortly after he was elected, Ford said it would scrap plans for the plant and invest in expanding and updating production in the U.S., an about-face the Trump administration celebrated.

Turns out, Ford (and Nissan) are among the few automakers to reduce the number of vehicles it exported out of Mexico through the first 11 months of 2017. Ford’s exports, dropped 19.5 percent, primarily because the company builds the Ford Fusion, Ford Focus and Lincoln MKZ cars in Mexico. Last year, sales of those cars dropped 15 percent as the U.S. consumer continued to shift away from buying cars.

By comparison Fiat Chrysler and GM accelerated their production in Mexico. GM’s exports from Mexican plants popped 26.3 percent from January through November 2017, according to the Mexican Automotive Association. Fiat Chrysler’s exports from Mexico surged by 35.5 percent over the same time period.

One factor is America’s growing appetite for pickup trucks. Sales of pickups rose 5.2 percent last year, according to research firm Autodata. GM builds some of its popular Chevy Silverado and GMC Sierra pickups in Mexico, while Fiat Chrysler’s Ram Trucks are also built south of the border. In 2017, Ram truck sales climbed 2.4 percent, while sales of the Chevy Silverado and GMC Sierra were up 2.2 percent and down 1.4 percent, respectively.

CNBC has reached out to GM and Fiat Chrysler for a comment on their production rates and exports from Mexico.

This entry was posted in Auto. Bookmark the permalink.

Leave a Reply