President Donald Trump may not like it, but the flow of vehicles built in Mexico and sold in the U.S. is not slowing down. In fact, Mexico is on pace for a record year for auto exports to the U.S., with the total likely topping 2.5 million vehicles.
New data from the Mexican Automotive Association shows auto exports to the U.S. jumped 22.4 percent last month. This year, shipments from Mexican auto plants to the U.S. total 2.34 million vehicles, up 9.3 percent compared with the first 11 months of 2017.
America’s growing appetite for pickups, SUVs and crossover utility vehicles is behind the trend. Those bigger vehicles now make up more than 60 percent of the auto sales in the U.S. and many of the most popular models are built south of the border.
Take the Jeep Compass. This year, U.S. sales of the refreshed Compass have more than doubled to just over 158,000 vehicles, all of which were imported from Mexico.
Another example is the Volkswagen SUV, the Tiguan. The refreshed model has been a huge hit for VW in the U.S. with sales topping 81,000 this year, an increase of 432 percent. To keep up with the demand, VW has more than doubled the number of Tiguans it exports from plants in Mexico, with most of those headed to the U.S.
Finally, there’s the Chevy Silverado, the best-selling vehicles in the General Motors line-up. Most Silverados are built at GM plants in Michigan and Indiana, but the four-door crew cab Silverado 2500 is built at GM’s plant in Silao, Mexico. In 2018, the Silverado is the most exported vehicle coming out of Mexico. The company has shipped 235,063 Silverados out of Mexico this year, the overwhelming majority winding up at dealerships in the U.S.
Under the new trade agreement between the U.S., Mexico and Canada, auto exports from Mexico to the U.S. could be slapped with a 25 percent national security tariff once the number of exports tops 2.4 million in a given year.