Car Production in Mexico
Reuters



Some car productions in Mexico are now facing big problems and may suspend their operation in the coming weeks according to a recently published article.

Some car manufacturers in Mexico already told the office of Manuel Gonzales, minister of economic development for Aguascalientes, that they are running out of car parts that are shipped from China due to COVID-19. This is expected to hit the stagnant economy of Mexico.

Gonzales told a news outlet that some important car manufacturers told him that they are going to have inventories from second to the third week of March. If they will find out that they will lack supplies like car parts and other key parts, they might suspend their operations.

The COVID-19 pandemic has devastated both the local and national economies of almost all countries in the world. It has rippled the global economy as well and has put an end to some supply chains in the world.

Meanwhile, German carmaker Volkswagen that is based in Mexico had isolated in the hospital their external trainer because the man is suspected carrying the virus after it visited its production plant in Puebla.

Mexico is the second-largest economy in Latin America and the country is also expected to have a big economic development this year. However, the country is now facing a big problem after they were hit by COVID-19 that might lead them to a mild recession.

Car production companies that are based in Mexico is one of the pillars of Mexico and they are contributing nearly 3 percent of the country's gross domestic product. Mexico is also the seventh-biggest car producer in the world according to the International Organization of Motor Vehicle Manufacturers.

The city of Aguascalientes in Mexico is the car manufacturing hub in central Mexico. This is the home of international car companies like Nissan Motor Co., Mercedes-Benz, Daimler, and the Renault-Nissan joint venture.

According to the spokesperson of Daimler, operations are running normally for the meantime in their car production in Mexico while Nissan started to send their key car parts through-plane even if the cost is higher instead by ship according to Luciana Herrmann, corporate communications of Nissan Mexico.

Herrmann said during an interview that they are currently monitoring their supplies and they have not yet encountered some problems in car production brought by COVID-19.

Meanwhile, Cuitlahuac Perez, head of Aguascalientes' automotive cluster, confirmed that Nissan executives have started their inventory to make sure that they have enough supplies in the next three weeks which may bring big impacts to their production site since its car parts are from China.

Perez said: "If the shipment of components is not normalized in the next three weeks, then in more or less a month they're going to begin suspending production here in Aguascalientes." This means that suspending production will lead to the economic recession and the separation of its employees.

Perez also heard the same problem and situation in some car productions in the states of Guanajuato and Chihuahua. If this problem will occur in the coming weeks, it is not a surprise anymore that Mexico will face a big economic downfall.

Economic Development minister in Guanajuato said that he did not yet receive any news from the car manufacturers that are based in their state while the government in Chihuahua did not give any comments about this problem.