Mexico’s automotive industry is entering a pivotal phase as global manufacturers rethink supply chains, tariffs reshape trade flows and the transition to electrification gathers pace. While uncertainty over evolving technologies and geo-politics continues to weigh on investment decisions, the country is leveraging its deep North American integration, competitive manufacturing base and expanding tyre sector to reinforce its position as a global auto parts powerhouse. Industry leaders now see fresh opportunities emerging not only from US and Canada but also from Latin America, Europe and India.

Mexico’s automotive parts industry is entering a new growth cycle powered by deep North American integration, expanding trade agreements, low-cost manufacturing and a rapidly evolving tyre sector that is adapting to electrification, hybrid vehicles and changing consumer preferences.

While global uncertainty over tariffs and the pace of electric vehicle (EV) adoption continues to cloud investment decisions, Executive President of Industria Nacional de Autopartes (INA) Francisco N. Gonzalez Díaz believes Mexico’s mature manufacturing ecosystem, skilled workforce and strategic location position it for another decade of expansion, one that could also strengthen ties with emerging automotive partners such as India.

“The country’s automotive supply chain has transformed dramatically since the North American Free Trade Agreement (NAFTA) came into force in 1994. Today, Mexico is the world’s fourth-largest producer of automotive parts and one of the most integrated manufacturing hubs in North America, exporting components and tyres primarily to United States and Canada while increasingly targeting Latin America and Europe,” said Diaz during an exclusive interaction with Tyre Trends.

He added, “The tyre sector is very important in Mexico. Over the past few years, we’ve seen major investments from companies such as Michelin and Pirelli and we also have Indian tyre manufacturers operating in Mexico. The industry is growing in both passenger and commercial vehicles while introducing technologies that reduce pollution and improve efficiency.”

Tyres produced in Mexico are exported not only across North America but also to Latin America and other international markets, making the sector an important contributor to the country’s automotive exports.

CHANGING LANDSCAPE

Although the Mexican tyre industry was once dominated by domestic manufacturers, the landscape has changed significantly. Companies such as Tornel were acquired by international firms as global players expanded their manufacturing footprint in the country.

Díaz noted that these acquisitions accelerated technology transfer and modernised production capabilities, effectively integrating local manufacturers into global supply chains.

Yet he believes the next generation of Mexican tyre companies may emerge through electrification.

According to him, two Mexican start-ups are currently developing tyres specifically for electric vehicles. Unlike conventional passenger-car tyres, EV tyres must withstand significantly greater vehicle weight while maintaining the dimensions and ride characteristics expected of passenger vehicles.

“These aren’t start-ups with four or five people,” he said. “They already employ close to 100 people and are developing tyres for one of the largest electric vehicle companies in United States.”

Unlike many markets where fully electric vehicles dominate industry discussions, Mexico’s transition is being led by hybrids.

With charging infrastructure still concentrated in homes, offices and selected commercial locations, plug-in hybrid vehicles are proving more practical than battery electric vehicles.

While EV sales are growing at roughly 30 percent annually, Díaz said they still represent a relatively small portion of the overall market.

Hybrid vehicles, however, are becoming the dominant technology, reshaping demand across the automotive supply chain including tyres.

CONSUMER PREFERENCES

Consumer preferences are also shifting in other ways. SUVs continue to gain market share across the Americas, while pickups remain popular throughout North America. Small passenger cars continue to sell primarily within Mexico but are growing more slowly than larger vehicles. At the same time, manufacturers are producing larger vehicles equipped with smaller engines as hybrid powertrains become more common.

Asian automakers are another defining trend. “Chinese, Japanese and Korean brands now account for the largest share of new vehicle sales in Mexico, reflecting changing consumer preferences and increasing regional competition,” said Diaz.

Climate is also influencing tyre demand. More intense rainy seasons are driving growing adoption of all-season tyres, which require more sophisticated compounds and engineering than conventional tyres.

“As weather patterns become more extreme, all-season tyres have become an increasingly important business for the tyre industry,” Díaz said.

EXPORTS LEAD

Mexico’s automotive success, however, remains closely tied to exports. Approximately 90 percent of the country’s automotive production is destined for United States and Canada, creating what Díaz describes as a single integrated North American manufacturing market rather than three independent national industries.

“Vehicle components frequently cross borders multiple times before final assembly. While tyres generally move only once or twice, other automotive components may cross the US-Mexico border as many as seven times during production,” he noted.

This integration is reinforced by United States-Mexico-Canada Agreement rules requiring 75 percent regional value content, encouraging manufacturers to source components within North America.

While Mexico’s dependence on exports often raises questions about vulnerability to geo-political tensions, Díaz argues the country’s manufacturing model resembles those of Germany and South Korea.

Instead of viewing exports as a weakness, he sees them as Mexico’s greatest competitive advantage.

MANUFACTURING APPEAL

The country’s manufacturing appeal extends well beyond geography. Mexico enjoys free trade agreements with markets throughout Latin America and is also a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), giving manufacturers tariff-free or preferential access to dozens of international markets.

The country also accounts for roughly 52 percent of Latin America’s advanced manufacturing capacity, making it the region’s undisputed industrial leader.

Equally important is the ecosystem surrounding automotive production. Mexico offers experienced engineers, skilled technicians, established suppliers, mature logistics networks and decades of manufacturing expertise.

“You don’t have to build an industry from scratch,” Díaz said. “The suppliers, knowledge, logistics and the customers are already here.”

The country’s position as the world’s largest exporter of trucks and a production hub for passenger vehicles including BMW models further strengthens domestic demand for both commercial and passenger vehicle tyres.

Unlike emerging manufacturing destinations that may offer inexpensive labour but lack industrial capabilities, Mexico already possesses the specialised workforce and supply chains necessary to support complex automotive production.

CERTAINTY IN UNCERTAINTY

Despite uncertainty surrounding global trade, investment enquiries continue. Some manufacturers have already secured land for expansion, while others remain cautious as they monitor evolving trade policies.

According to Díaz, around 10 to 12 Indian companies are currently exploring investments in Mexico to establish tier-II and tier-III automotive component operations serving North America.

The interest reflects Mexico’s continued attractiveness even after renewed tariff discussions under the Trump administration.

When United States introduced new tariffs shortly after President Donald Trump’s return to office, Mexico initially appeared vulnerable. However, automotive components that complied with USMCA rules quickly regained tariff-free access.

“The direct impact on Mexican auto parts has been minimal,” Díaz said.

Instead, tariff-related costs have largely been absorbed by vehicle manufacturers rather than component suppliers.

Indirect effects have emerged through higher prices for steel, aluminium and other raw materials, prompting manufacturers to reconsider sourcing strategies, particularly for North American-produced steel.

Even so, Díaz believes the overall trading framework continues to function effectively.

LOCAL ADVANTAGES

Mexico’s manufacturing competitiveness is reinforced by strong local sourcing. On average, around 85 percent of tyre materials and related inputs are sourced domestically, with only about 15 percent imported, although specialised products can require significantly higher import content.

Tyres themselves account for approximately 8–9 percent of Mexico’s automotive components industry by value. Efficient logistics further enhance competitiveness.

Rail remains the preferred mode of transport for most automotive exports because production schedules are planned months in advance. Trucks handle regional distribution, while shipping and air freight are used only when necessary.

Energy costs represent another important advantage. Abundant natural gas from neighbouring Texas has helped keep electricity prices among the lowest globally, while Mexico also possesses substantial solar and wind resources.

The remaining challenge lies in expanding transmission infrastructure so electricity generated in one region can be distributed more efficiently across the country.

Manufacturing costs, meanwhile, continue to rise, but so does productivity. Mexico is no longer the ultra-low-cost manufacturing destination it was in the 1970s. However, Díaz said wage growth is increasingly being matched by productivity gains.

Citing projections from the OECD and the Economic Commission for Latin America and the Caribbean (ECLAC), he expects productivity to continue improving over the next five years, allowing higher wages without significantly eroding industrial competitiveness.

HURDLES IN FRAY

The industry’s biggest challenge today is uncertainty rather than costs.

Rapid policy shifts surrounding electric vehicles, changes to the US Inflation Reduction Act, Europe’s evolving emissions regulations and emerging hydrogen technologies are forcing manufacturers to invest simultaneously in internal combustion engine and EV production.

Companies must finance parallel production lines despite demand remaining difficult to predict. “It’s a significant capital expenditure,” Díaz said. “But we know the future is coming, so we have to be ready.”

Mexico’s tyre recycling sector remains comparatively underdeveloped.

Less than 5 percent of end-of-life tyres are processed domestically with most used tyres exported to United States, where larger recycling infrastructure already exists. Domestic recycling operations remain small and largely artisanal.

On policy, Díaz said Mexico currently has no immediate plans comparable to India’s ethanol blending programme, although regulatory changes can be implemented quickly when necessary.

Trade policy, however, continues to encourage localisation. “Imported vehicles that fail to meet Mexican content requirements face tariffs, incentivising manufacturers including motorcycle producers from India to incorporate locally produced components,” said Diaz.

He noted that Mexican suppliers now provide roughly 90 percent of the components used in motorcycles assembled in the country, compared with only about 2 percent when localisation efforts first began.

OPTIMISTIC TURNS AHEAD

Looking ahead, INA expects Mexico to deepen its integration not only within North America but also across Latin America and Europe.

The association believes Mexico’s share of the Mercosur automotive components market could rise from roughly 2 percent today to as much as 10–15 percent over the next five years as manufacturers increasingly seek competitive production bases.

At the same time, European companies facing rising costs and geopolitical uncertainty are shifting portions of their manufacturing footprint to Mexico to serve markets on both sides of the Atlantic.

India will also play a growing role in that strategy.

Rather than simply importing or exporting products, Díaz envisions deeper industrial partnerships extending into third-country markets. “Our job is not to wait and see,” he said. “Our job is to strengthen the relationship.”

For INA, the long-term opportunity extends beyond bilateral trade.

As a member of the G7 association of the world’s seven largest automotive parts-producing countries, Mexico is positioning itself not merely as a manufacturing destination but as a strategic partner helping shape the future of the global automotive supply chain.

Bridgestone has announced a European leadership appointment aimed at sharpening customer focus, streamlining engagement across product groups and supporting its ongoing growth plans. Stefano Sanchini will become President, Europe Sales, effective 1 October 2026, leading the company’s European sales organisation across both Consumer and Commercial segments.

The expanded role unites sales activities spanning passenger car, truck and bus, agriculture, off-the-road, motorcycle and original equipment. Sanchini brings over 20 years of international leadership experience in the automotive and tyre sectors, with a career covering Europe, Middle East, Africa and India. Since joining Bridgestone in 2017, he has held several senior positions, including Managing Director of Bridgestone India.

Most recently, as Vice President for Consumer Replacement in Europe, he helped strengthen customer engagement, commercial performance, profitability and regional market growth. Bridgestone said the appointment underscores its commitment to customer relationships, commercial execution and simpler cross-market operations. Sanchini will pursue sustainable growth while developing capabilities and partnerships supporting the company’s long-term European strategy.

Mete Ekin, Group President EMEA, said, "Our customers increasingly operate across multiple product categories and expect a consistent experience wherever they engage with Bridgestone. By bringing our sales activities together under one European structure, we are creating a simpler, more connected organisation that will help us respond faster, collaborate more effectively and continue building strong partnerships with our customers."

Yokohama Europe has appointed Giuseppe La Iacona to a series of senior leadership roles as the company seeks to strengthen its position across the region.

La Iacona joined the business on September 15 and will assume responsibility for supporting growth and organisational consolidation in the European market.

He brings more than 20 years’ experience in the tyre industry, spanning sales, marketing, business development, country management and international customer relations. He has held senior roles across several European markets, developing experience in managing local dynamics while driving cross-border business expansion.

Reporting to Takashi Maki, La Iacona has been appointed General Manager for southern Europe, where he will lead a newly created regional cluster covering Italy and France. The role is intended to improve coordination and operational synergies between the two markets.

He will also serve as Chief Executive of Yokohama Italia, with overall responsibility for the Italian subsidiary, alongside taking on the role of head of international customers. In that capacity, he will oversee the management and development of clients operating across multiple European markets, with the aim of creating a more consistent commercial approach and strengthening collaboration between subsidiaries.

His remit includes improving organisational alignment and fostering closer cooperation between markets and customers as the company expands its European operations.

“I am very pleased to welcome Giuseppe to YOKOHAMA Europe at an important stage in our development,” said Maki. “His extensive international experience, deep knowledge of the tyre industry and ability to work across different markets will be valuable assets as we continue to strengthen our European organisation and pursue sustainable growth.”

La Iacona said: “I am excited to join YOKOHAMA Europe and to contribute to the company’s next phase of growth in Europe. YOKOHAMA has a strong heritage, a distinctive brand and significant opportunities across the European market. I look forward to working closely with our teams, customers and partners across countries to further develop the business and strengthen our presence in the region.”

Özka Tyre, a prominent Turkish manufacturer of tyres for agricultural and construction equipment, has reinforced its leadership team as part of a broader push towards global expansion and technological modernisation in production. The company has appointed Mehmet Yüksel as its new Chief Operating Officer, bringing aboard an executive with extensive senior experience from Goodyear’s Luxembourg-based international organisation.

In his new role, Yüksel will oversee functions central to Özka’s production and operational strength. His responsibilities encompass production, quality, research and development, planning, investment and projects, electricity and maintenance, occupational safety and quality management systems, positioning him to steer critical areas of the company’s industrial performance.

Driven by investments and a focus on advancing its manufacturing strength, Özka continuously monitors shifts in the worldwide tire sector, particularly technological progress in Europe, and uses those insights to shape its future production infrastructure. As new investments prepare to elevate its output capacity and technical systems, the firm is simultaneously bolstering its organisational framework to sustain that transformation.

Cabot Corporation has named Steve Delahunt, currently Vice President and Corporate Treasurer, to assume the Chief Financial Officer role on an interim basis starting 1 October 2026. He will hold the position while Cabot continues searching for a permanent finance chief.

The interim appointment follows the previously disclosed leadership transition in which Erica McLaughlin, Executive Vice President, Chief Financial Officer and Head of Corporate Strategy, will become President and Chief Executive Officer on the same date. McLaughlin succeeds Sean Keohane and will relinquish her CFO duties at that time.

Delahunt brings over three decades of finance and treasury experience, including nine years leading Cabot's investor relations function through January 2026. As Corporate Treasurer, he oversees global treasury operations, capital markets strategy, liquidity management, banking relationships, risk management and pension investments. He has been central to Cabot's capital allocation, financing, investor engagement and strategic growth initiatives, as well as strengthened shareholder relations during his investor relations tenure.

McLaughlin said, “Steve is a highly respected finance leader with deep knowledge of our business, strong relationships across our global organisation and a proven track record of disciplined financial leadership. As we continue executing our strategy and building on our strong financial position, Steve’s experience, judgment and understanding of our business make him exceptionally well suited to lead our finance organisation while the Company conducts its search for our next Chief Financial Officer.”