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Borderlands: Mexico truck makers break export record in August

Exports of Mexican-made trucks totaled 17,811 in August, with exports to the United States growing 72% year over year, the highest monthly levels ever recorded. (Photo: Jim Allen/FreightWaves)

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Mexico truck makers break an export record in August; trucks moved $44 billion in U.S.-Mexico cross-border freight in July; Kia announces a $408 million expansion to grow its operations in Mexico; and an autonomous vehicle technology maker plans a factory in Mexico.

Mexico truck makers set monthly export record in August

Mexico’s heavy-duty truck exports soared to record levels in August, boosted by improving supply chains, said Miguel Elizalde, president of Mexico’s National Association of Bus, Truck and Tractor Producers (ANPACT).

Exports of Mexican-made trucks totaled 17,811 in August, with exports to the United States growing 72% year over year (y/y) to 16,982 units, the highest monthly levels ever recorded. 

“The supply chain begins to be synchronized in August and we believe that this synchronization will be seen during the rest of the second half of this year,” Elizalde said during a press conference Thursday in Puebla, Mexico.

Elizalde was announcing ANPACT’s annual Expo Transporte conference set to take place Oct. 5-7 in Puebla. Elizalde also shared the latest data from Mexico’s truck manufacturers.

“We’ve seen the recovery already at levels higher than any other month in the previous four years. We hope that it can be maintained to achieve the deliveries of orders that have had impacts on our industry,” Elizalde said.

Truck makers and parts manufacturers with assembly plants and factories in Mexico include Freightliner, Kenworth, Navistar, Hino, International, DINA, MAN SE, Mercedes-Benz, Isuzu, Scania, Cummins and Detroit Diesel.

Total truck production in Mexico during August increased 59% y/y to 20,197 units.

“We must take full advantage of the virtues of the [United States-Mexico-Canada Agreement] and it is necessary that progress is made in Mexico in the institutional coordination of customs to streamline foreign trade,” Elizalde said. “Mexico requires clarity, certainty and efficiency in border procedures so that exports are an engine for the country.”

The U.S. continues to be the main destination for trucks produced in Mexico, accounting for 94.5% of exports in May, followed by Canada, 2.4%, and Colombia, 1.6%.

Freightliner was the top truck producer and exporter in Mexico in August. The company built 11,793 trucks, a 46% y/y increase; and exported 11,113 units, a 51% y/y increase. 

International Trucks Inc. produced 6,218 units in August, a 105% y/y increase, and exported 6,069 units, a 142% y/y increase.

Kenworth produced 1,406 units in August, a 35% y/y, and exported 624 trucks, a 3% y/y increase.

As of Thursday, outbound dry van truck loads (OTVI.LRD) from Laredo, Texas, were down about 7% week over week but were up 7.7% month over month. The port of entry in Laredo is a major cross-border hub for automotive goods between the U.S. and Mexico.

Chart: FreightWaves SONAR. To learn more about FreightWaves SONAR, click here.

Trucks moved $44B in US-Mexico cross-border freight in July

Freight between the U.S. and Mexico totaled $65.2 billion in July, up 17.2% from the same year-ago period, according to data released Wednesday from the Bureau of Transportation Statistics (BTS).

Trucks moved a total of $44 billion, or 66%, of all cross-border U.S.-Mexico freight during July. 

In addition to trucks, ocean carriers moved $8.7 billion in freight between the U.S. and Mexico in July, while rail moved $7.7 billion, air cargo $1.6 billion and pipelines $1.4 billion.

The three busiest truck ports for cross-border freight were Port Laredo, Texas ($19.4 billion), Detroit ($9 billion) and El Paso/Ysleta, Texas ($6.2 billion), accounting for 43.8% of total cross-border truck freight.

Port Laredo was also the busiest cross-border rail port in July, accounting for $4.3 billion, followed by Port Huron, Michigan, $2.3 billion and Detroit, $2.2 billion.

Cross-border freight between the U.S. and Canada in July totaled $67.4 billion, up 21% from July 2021. Trucks accounted for $33.5 billion in freight between the two countries in July.

The top three cross-border truck commodities between the U.S., Canada and Mexico during July were computers and parts ($15.3 billion), electrical machinery ($11.9 billion), and motor vehicles and parts ($9.9 billion).

Kia announces $408M expansion to grow operations in Mexico

Korean automaker Kia announced Thursday it is expanding its factory in Pesquería, Mexico, adding five new buildings and creating 800 more jobs, according to El Economista.

The Pesquería plant opened in 2016 and produces the Forte, Rio and Hyundai Accent models. Kia currently has 2,362 workers in Mexico. 

The $408 million investment in its Pesquería plant will help Kia increase production from about 250,000 cars a year to around 400,000 units annually, officials said. The expansion is expected to be completed in 2024.

The vehicles produced in Pesquería are for the North and South American markets. Pesquería is a suburb of Monterrey, Mexico, one of the largest automotive manufacturing clusters in the country. 

Autonomous vehicle technology maker to open factory in Mexico

HL Klemove has begun construction on a $65 million manufacturing facility in Saltillo, Mexico, its first manufacturing facility in North America, according to Mexico Industry.

The Korea-based company specializes in manufacturing technology for autonomous vehicles, such as high resolution lidar, cameras and chassis domain control units. 

The factory will employ 500 workers and is scheduled to open in July 2023. Saltillo is located about 186 miles south of the U.S.-Mexico border crossing in Laredo, Texas.

The new factory will support HL Klemove’s largest customers, Hyundai Motors and Kia, company officials said in a news release.

HL Klemove currently has three manufacturing plants in Asia. The company’s North American headquarters is in Detroit. 

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Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Florida, Maryland and Texas. Contact [email protected]