Mexico Posts Record Production, Exports, Domestic Sales

Mexico’s auto industry produced 3.47 million light vehicles last year, up 2% from its record in 2015, the Mexican Automotive Industry Assn. reports.

The country exported 80% of its output, including a 7% increase to 2.13 million vehicle shipments to the U.S. in 2016. Mexico’s exports to other markets shrank last year.

Continued growth appears unlikely if the Trump administration makes good on its aim to repatriate auto worker jobs from Mexico to the U.S. President Trump has repeatedly vowed to impose a 35% import tax on Mexican-made vehicles, renegotiate the North American Free Trade Agreement and/or pull out of NAFTA entirely in a quest to hike auto industry employment in the U.S.

Domestic car sales in Mexico last year surged 19% to a record 1.60 million cars and light trucks, the Mexican Assn. of Automobile Distributors says. But observers note that a booming market at home won’t be enough to absorb a possible sudden and significant decline in U.S. shipments.