Mexico’s Ministry of Economy has said that a five-year tariff exemption for imported vehicle parts is available only to carmakers that already have production facilities in the country.
The clarification, issued on 16 October, relates to a decree published on 13 October, which the ministry said applies to the 11 unnamed light vehicle manufacturers with established manufacturing operations in Mexico.
It rejected interpretations that the measure extends duty-free imports to entities without manufacturing facilities.
Reuters reported that the decree reduced the import duty on certain assembly components – including semi-knocked-down (SKD) and completely knocked-down (CKD) kits – to zero from 10%.
Manufacturers seeking the exemption must have bonded warehouse authorisation for vehicle assembly and manufacturing under the Customs Law, as well as prior approval from the ministry to import the parts.
Eligible companies must ensure traceability of the components and provide the vehicle identification numbers (VINs) for every vehicle assembled using exempt parts.
The ministry plans to issue guidelines setting minimum domestic production requirements for complete vehicles and limits on imports relative to total output.
Only high-volume manufacturers with full production processes will be permitted to import parts through SKD or CKD arrangements, with the intention of increasing local content over time.
Imported assembly parts accounted for 0.01% of Mexico’s total automotive imports in 2025, according to the ministry.
The decree is intended to maintain automotive production capacity and jobs, improve Mexico’s competitiveness for investment, and encourage automotive companies operating in the country to move production lines from overseas to Mexico, the ministry added.
It also aims to replace imports of fully built vehicles from countries lacking trade agreements with Mexico by using domestic assembly.
The ministry referred to the announcement by Mexico’s President in May that General Motors will transfer two production lines from China to Mexico.
The process will begin with assembly and later incorporate local content.
The ministry said “contrary to some interpretations of the 13 October decree, it will not facilitate the importation of parts for vehicle assembly by companies without production facilities in Mexico and without adding value, and it will not in any way facilitate access for vehicles from countries without a treaty with our country, but rather seeks to strengthen the automotive supply chain in Mexico”.
