COVID-19 crisis and the automotive industry in Mexico: public policies and firm strategies

ABSTRACT

The automotive industry's performance in Mexico was affected by the health and economic SARS-CoV2-crisis. As part of the complex North American supply chain, several factors influenced decision-making on crisis management. We determined the multilevel governance mechanisms to characterise the process of implementing activities. The productive performance of the industry, capacity utilisation rate per plant, employment, and foreign direct investment were evaluated. The federal government's support was scarce, although subnational governments were more sensitive to cooperate with stakeholders. Companies had to adapt to pandemic conditions and also to changes in the political and institutional environment driven by the USMCA and tensions between the USA and China. As a result, inward FDI flows and nearshoring practices are growing in the northern Mexican regions, stabilising the supply chains.