Latam Insights: Mexico—Q2-2026 Automotive Sector Review

KEY TAKEAWAYS

• The automotive sector closed the first half of 2026 with mixed signals, with a resilient result in both light and heavy vehicles.

• Light vehicle sales maintained a favourable trajectory, growing 7.7% year over year in June and 5.3% in the first half of the year, supported by the resilience of the domestic market despite a more moderate consumption and economic activity backdrop.

• Light vehicle production and exports show a limited recovery, with year-to-date production almost unchanged and exports up 1.4% in the first half, although they remain exposed to automaker adjustments, external demand and trade tensions.

• In heavy vehicles, June’s rebound has not yet reversed the accumulated weakness, as retail sales, production and exports remain in negative territory in the first half of the year.

• Looking ahead, the sector will depend on U.S. demand, the USMCA review, and reshoring decisions, which are factors that will keep uncertainty high although Mexico retains important advantages as a regional manufacturing platform.

During the first half of 2026, Mexico’s automotive sector showed a mixed performance. On the one hand, the light vehicle market continued to show resilience on the sales side, which has managed to hold up in a less dynamic economic environment. Production remained virtually stagnant and exports posted a moderate cumulative recovery—despite a relevant decline in June—reflecting the sector’s sensitivity to external demand, trade tensions, and production adjustments by some automakers. In heavy vehicles, the cumulative balance remained weak, despite the improvement seen in June figures, which could point to a gradual recovery conditioned by factors such as investment—particularly in machinery and equipment.

LIGHT VEHICLES

• Mixed results during the first half of the year

In June, light vehicle sales reached 126,902 units, representing year-over-year growth of 7.7%, above the 5.0% increase observed in May (chart 1). As a result, 754,518 units were sold during the first half of the year, equivalent to cumulative annual growth of 5.3%, compared with an increase of only 0.4% over H1-2025. In this sense, the performance of sales continued to point to some resilience in the domestic market, even amid moderate consumption and weaker economic activity.

Among the brands affiliated with the Mexican Automotive Industry Association (AMIA), Nissan remained the market leader, with a 16.8% share and 127,099 units sold during the first half of the year (chart 2 and table 1). It was followed by General Motors, with a 12.8% share, 96,921 units sold and cumulative annual growth of 2.5%. Volkswagen ranked third, with an 8.7% market share, 65,565 vehicles sold and cumulative annual growth of 1.5%. Toyota, KIA and Mazda also stood out as some of the most relevant competitors in the domestic market. However, there is greater competitive pressure from new market entrants, which have gained ground relative to traditional brands. In particular, Nissan has reduced its share from 18% for the full previous year to 16.8% so far in 2026, while this group of other competitors has increased its presence from 9.2% to 11.1% over the same period, reflecting a more competitive and diversified supply environment.

In parallel, brands not affiliated with AMIA—several of them associated with new competitors from Asia—continued to gain visibility in the Mexican market. Although the information available in official records does not fully capture all participants, AMDA reports suggest that this group maintains a relevant presence. This can be considered an important factor in explaining greater competition in the domestic market and pressure on traditional brands.

On the production side, 354,221 vehicles were produced in June, representing a year-over-year decline of -1.9%, after a -3.7% drop in May and a positive variation of 2.1% in April. Therefore, over the last six months, production has shown a moderate performance, with cumulative annual growth of only 0.4%, totaling 1,996,304 units.

At the brand level (table 2), Chrysler posted cumulative growth of 34.9% during the first half of the year, with 242,228 units produced, followed by Volkswagen, which grew 24.5% and produced 198,297 units. Among the brands that posted declines during this period, Nissan (-25.8%) and Mercedes-Benz (-24.6%) stood out, both associated with production adjustments at their respective plants—Nissan closed its Morelos plant last quarter, while Mercedes-Benz announced last year that it would end production in Mexico by late 2026—as well as Mazda (-22.1%) and BMW (-14.6%), which softened their cumulative declines compared with the previous month after better figures in recent months. In terms of market share, General Motors continues to lead light vehicle production in Mexico, with a 22.1% share, followed by Nissan (13.6%), Chrysler (13.4%), Ford (10.6%) and Volkswagen (9.5%).

Exports showed a more mixed performance (chart 3 and table 3). In June, 301,009 light vehicles were exported, representing a year-over-year decline of -9.2%. However, in the cumulative first half of the year, exports reached 1,689,245 units, with annual growth of 1.4%. By brand, the strongest cumulative gains were observed in Stellantis/Chrysler, with growth of 51.3%; Volkswagen, with 37.4%; and Audi and Acura, both with increases of 13.4%. In terms of share, General Motors continued to lead light vehicle exports, with a share close to 24.2%, followed by Stellantis/Chrysler (12.4%), Ford (11.6%), Nissan (9.6%) and Volkswagen (9.6%). The monthly decline in June, compared with the cumulative advance for the semester, suggests that the export sector maintains a positive trajectory but remains vulnerable to specific production adjustments and changes in external demand.

RISKS AND OUTLOOK AHEAD

Looking ahead, one of the main risks for Mexico’s automotive sector remains external demand dynamics, particularly from the United States. INEGI reports that, during the first half of the year, the United States accounted for 75.9% of Mexican light vehicle exports; therefore, any slowdown in that market, changes in consumer preferences or inventory adjustments could have direct effects on Mexican exports. This exposure also means that Mexico’s industry is highly sensitive to regulatory, trade and political changes in that country.

In this context, the USMCA review and the possibility of stricter rules of origin, regional content requirements or supply chain traceability remain key factors to monitor. These trade discussions are directly linked to production location decisions, as automakers may seek to reduce exposure to potential trade costs or increase production flexibility within the United States.

Toyota’s recent announcement illustrates this dynamic. The company announced a USD 3.6 billion investment to expand its plant in San Antonio, Texas, with a second assembly line for Tacoma production, in addition to the creation of 2,000 jobs and the expansion of the plant through 2030. As a result, Toyota indicated that it will move Tacoma production—which, according to INEGI figures, is the only Toyota vehicle produced in Mexico since 2021—from its Baja California plant to the expanded Texas plant over an estimated four-year period. Although the company reiterated its commitment to its operations in Mexico, the move reinforces the view that automakers are adjusting their regional strategies amid a more uncertain trade environment and greater pressure to produce within the United States.

Taken together, these factors help explain part of the recent moderation in exports. However, it is important to note that, despite this slowdown—and even the decline in its weight within the country’s total exports—Mexico continues to consolidate its position as the main supplier of vehicles to the United States (chart 4). This suggests that, while the sector faces structural pressures, it maintains a solid structural position within North American value chains.

Nevertheless, the loss of relative share for autos within national exports is a point of concern. This trend could reflect a gradual shift toward other sectors with lower value-added content, both locally and regionally. In particular, the stronger momentum in industries such as household appliances—with a relevant share of inputs from Asia—poses the risk of an export recomposition that is less intensive in regional productive integration, which could limit the benefits from linkages that the automotive industry has historically generated.

HEAVY VEHICLES

In June, the heavy vehicle outlook improved compared with previous months (chart 5 and tables 4, 5, and 6), recording positive year-over-year variations across all components for the first time in several months. Retail sales totaled 3,194 units, with annual growth of 3.9%, while wholesale sales reached 3,278 units and rebounded 45.5%. On the production side, 15,262 units were manufactured and 12,730 were exported, implying annual gains of 7.6% and 3.2%, respectively.

However, the cumulative balance for the year remains weak. During the first half, retail sales totaled 16,072 units, equivalent to a -21.8% decline; production reached 70,876 units, with a -12.9% contraction; and exports totaled 58,260 units, down -14.5%. The exception was wholesale sales, which accumulated 14,979 units and maintained growth of 3.0% thanks to the rebound in the latest month. Thus, although June offers a positive signal, it still does not appear sufficient to confirm a structural recovery in the segment.

The accumulated weakness in heavy vehicles remains closely linked to the low-investment environment. The first-quarter report already noted that gross fixed investment, particularly in machinery and equipment, had performed unfavourably, limiting fleet renewal and the purchase of new units. This directly affects heavy vehicles, given that their demand depends more on business investment decisions, freight transportation, logistics and expectations for productive activity than on household consumption.

For this reason, June’s rebound should be interpreted with caution. The simultaneous improvement in sales, production and exports could be an initial sign of normalization after several months of weakness, especially if transport demand begins to stabilize and companies gradually resume investment plans. However, cumulative levels remain below those observed in more favourable periods, so it is still not possible to speak of a full recovery, as this reading may have been positively influenced by base effects. In the coming months, it will be key to monitor whether monthly gains are sustained, whether investment in machinery and equipment stops contracting and whether external demand—mainly from the United States—maintains enough traction to support production and exports.

CONCLUSION

Overall, Mexico’s automotive sector closed the first half of 2026 with mixed signals. Light vehicles maintained a favourable performance in domestic sales, while production remained practically stagnant and exports showed a moderate cumulative increase, despite June’s monthly decline. In heavy vehicles, the recent improvement is encouraging but starts from a weak base and has not yet reversed the year’s accumulated deterioration. Looking ahead, the sector’s evolution will largely depend on three factors: U.S. demand, the outcome of the USMCA review and automakers’ production relocation decisions. In this context, Mexico retains relevant advantages as a regional manufacturing platform, but it faces the challenge of preserving its competitiveness in an industry increasingly exposed to trade, regulatory and strategic considerations within North America.