More vehicles, fewer electronics: Mexico's border-state exporters diverge

As we wrote earlier this year, Mexican manufacturing has thrived on the back of the US "nearshoring" boom. As 2024 has progressed, we can chart the differing export trends between sectors.

With the help of regional foreign trade data, newly added to the CEIC platform, we can also get a sense of the strengths and weaknesses of Mexico's various border states.

In the second quarter, Coahuila, on the border with West Texas, saw its exports rise by more than 9.4% year-on-year. Chihuahua, which borders Texas and New Mexico, experienced a decline of 2.1% on that basis.

The differences can be explained by these two states' industrial specialties. Coahuila is highly specialized in in vehicles and auto parts.

Chihuahua, by contrast, has a much more diversified production base that makes it Mexico's biggest exporting state. The electronics industry is significant and it's the original home of the "maquiladora" NAFTA-era factory model, where plants import and assemble duty-free components for export.

Indeed, auto-related exports were the primary driver of Mexico's exports in Q2. As our second chart shows, 71% of the USD 4.2 billion ear-on-year export increase in Q2 was due to vehicles. The second-largest category—computers, communication equipment, and other electronics—saw a decline of USD 39 million.

Chihuahua's electronics exports fell by almost 10%, more than offsetting gains by other industries (including USD 327 million by the auto sector) and pushing down the state's overall exports by USD 398 million. That was the biggest drop among border states.

Another border state whose exports declined in Q2 was Nuevo León (whose capital is Monterrey, the nation's second-largest metro area). The state is set to become a global hub for electric mobility when Tesla completes its latest "gigafactory;" Elon Musk's electric-vehicle company has delayed completion of this facility, however.

If you are a CEIC user, access the story here.