The USMCA Will Expand Wire Harness Manufacturing in Mexico
Automotive wiring will be produced more extensively because of its importance in the growing manufacture of electric vehicles. This means that wire harness manufacturing in Mexico will expand and extend from Ciudad Juarez to Merida.
Over the last several decades, Mexico has become a global leader in harness manufacturing (automotive electrical wiring systems). Production of this class of auto parts in the country is now valued at approximately US $8 billion. The volume of wire harness manufacturing in Mexico is sufficient to equip the more than 17 million vehicles a year that are manufactured in the North American region. A wire harness is an application of sorts that binds wires together in a specific formation. There are several different variations of harnesses, with industrial harnesses being most prevalent. Wire harness manufacturing that is done in Mexico produces a sturdy and reliable product.
The passage of the USMCA will mean more wire harness manufacturing in Mexico
As a result of the passage of the United States – Mexico – Canada Trade Agreement (USMCA), an increasing amount of wire harness technology will be integrated into the growing regional manufacture of electric and hybrid vehicles. It is projected that, in the medium term, there will be an increase of up to 20% in overall auto parts production, and that wire harness manufacturing in Mexico will follow this trend.
According to the president of Mexico’s National Auto Parts Industry Association (INA), Oscar Albin, the opportunity for more wire harness manufacturing in Mexico is related to the new and expanded regional content rules that the USMCA has outlined for the North American automotive industry. The USMCA requires that, for an automobile to be considered as “originating,” 75% of the value of such a vehicle must be added in the region. Under the terms spelled out by the North American Free Trade Agreement (NAFTA), the corresponding figure was just 62.5%.
The president of INA has proudly stated that “We (in Mexico) are the kings of wire harness manufacturing in the region. All of the wire harnesses that have been incorporated into the manufacture of 17 million vehicles that have been assembled in North America in the past year have been manufactured in Mexico.
It is noteworthy to point out that this important automotive component is produced by Mexican workers in places like Ciudad Juarez, Chihuahua; Merida, Yucatan; and throughout the Mexican Republic. Wire harness manufacturing in Mexico encompasses not only automobiles, but are also produced for airplanes, household appliances, and other types of electrical items. Albin notes that as technology continues to advance “wire harness manufacturing in Mexico will be more complex and the country’s leadership in the production of this important component will continue to advance.” “As technology advances,” he states, “cars will end up being computers on wheels and as long as there is no other way to conduct electricity with wires, cars will still have harnesses.
Given the prominent position that Mexico has assumed in the industry over the last several decades, the manufacture of auto parts is an economic sector with a bright future. With the advent of the application of artificial intelligence to the automobile parts and components that are required to achieve autonomous driving and electric mobility will have to be manufactured. The country will be a major player in the production of these items and will continue to lead the way through increased wire harness manufacturing in Mexico.
In addition to becoming a more prominent player in the production of electric vehicles (EVs), Mexico will also increase its purchase of such items. Availability of hybrids and EVS, which has been stuck at 8 models for almost a decade, has more than tripled in the past three years. Today there are 27 models of this type of vehicle that are now ready for purchase domestically.
2020 is expected to be a record year for wire harness and auto parts production in Mexico
As the new regional rules of origin are gradually implemented, content that is manufactured in North America, and in Mexico, specifically, will increase. The president of the Mexican National Auto Parts Industry Association, Oscar Albin, projects that his sector’s production for 2020 will exceed a total of US $100 billion, and, in doing so, will set an all-time record.
In addition to the production of a greater volume of wire harnesses in Mexico, parts producers there will increase their output of items such as radiators, motors, spark plugs, seats, rims, steering wheels, axles, automotive glass, as well as of a host of other electric components that go into the manufacture of passenger vehicles.