| VIEW FROM THE TOP
COVID-19 A TURNING POINT FOR THE INDUSTRY: AMIA FAUSTO CUEVAS Director General of AMIA
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Q: How has AMIA tried to convince the government to
and sales levels. The goal now is to get back on track and
label the automotive industry as essential during the
look forward to regaining pre-pandemic levels.
COVID-19 crisis? A: We have remained in close communication with different
Q: What other impact will the COVID-19 pandemic have on
players in the executive and legislative branches, including
the Mexican automotive industry?
the Ministry of Economy, the Ministry of Foreign Relations,
A: Mexico is highly dependent on foreign trade. Around 88
IMSS, deputies and senators. The automotive industry
percent of what is produced in Mexico goes abroad, mainly
generates 3.8 percent of Mexico’s GDP, 20.5 percent of the
to the US, Canada, Europe and Latin America. Regarding
manufacturing GDP and approximately 980,000 direct jobs.
the internal market, 64 percent of what is sold in Mexico
Given its relevance, we approached different players and
is imported. We depend greatly on international trade,
finally received the approval for the automotive industry
so much so, that the reignition of the industry should be
to be labeled as essential. Coming tasks are focused on
aligned with the recovery in other affected markets. It is
resuming operations.
not sound to produce vehicles that do not have an end customer. Demand will grow gradually.
As the industry gets ready to resume operations, we offer an optimistic perspective to return to the new normal. We have
On the other hand, we should get used to a new normal.
talked with IMSS about the health and safety protocols that
Specifically, all health and safety protocols that are going
must be followed. The most important element in resuming
to be applied when resuming operations most likely will
operations is to ensure the health and safety of company
prevail for a certain period of time to provide certainty that
collaborators. It is necessary to set all necessary measures to
the pandemic has indeed ended and there are no risks of
prevent contagions at the plant. Going back to work should
new contagions. This new normal will change the way we
not mean an increase in cases.
produce and sell. We have yet to see how this new socialdistanced world will affect economic activities, including
Q: What production levels should the industry expect in
automotive. The automotive industry will get back on track
the short term?
under a different reality than what we were used to.
A: Production and exports have remained close to zero given that most OEMs and plants remained closed in April. This
Q: How feasible is it to delay the enforcement of USMCA’s
situation is unprecedented. We have never experienced that
new rules of origin?
in the history of the industry. However, we need to remember
A: The alternative transition regime is a figure that is
that the situation is global. Other countries around the world
only applicable to automotive rules of origin. It is not an
have gone down this path at different paces. As for Mexico,
instrument that could be applied to other sectors. This
we have a two-to-three-week time difference compared to
was just published on April 30 as these kinds of regimes
the US and Europe in terms of COVID-19 cases. In Asia, as of
are a feasible option that each company in each country
early May, people had already returned to work. The global
should decide on. This offers the possibility for companies
pandemic will have significant negative effects. It will be
to extend the time frame under which new rules of origin
really difficult for the industry to recover lost production
should be met. The treaty as it is today established that new rules of origin should be met within a three-year period. However, under alternative transition regimes, this could
The Mexican Association for the Automotive Industry
be extended to five years or longer depending on the plans
(AMIA) is a civil association formed in 1951 with the goal
that each company has regarding compliance. Having said
of representing the interests of vehicle manufacturers
that, this regime could only apply to light and heavy OEMs,
established in Mexico
not to the entire automotive supply chain.
