Production Capacity in Mexico Will Jump 65% in 8 Years

Carmaking capacity in Mexico will surge from 3.4 million units in 2014 to 5.6 million in 2022, according to LMC Automotive. The market research firm expects overall capacity in North America will expand over the same period to 21.3 million units per year from 18.2 million.

Mexico will account for two-thirds of the region's growth during the eight-year period, says Jeff Schuster, senior vice president of forecasting.

He says capacity in the U.S. will gain 1.2 million units, mostly in the South, by 2022. But Canada's annual capacity will shrink by 200,000 units to 2.2 million vehicles, dragged down by relatively high production costs.

By 2022 Mexico's share of vehicle production in North America will climb to nearly 25% from about 3% in 1985. Over the same interval, U.S. and Canadian shares will drop from 85% to 65% and from 13% to 10%, respectively.

Schuster predicts capacity utilization throughout North America will remain at or above a "very lean" 90% through 2022.