The Mexican automotive industry, its domestic market in tatters following the peso devaluation, is exporting more of its production of cars and light trucks to make up for lost sales. And parts manufacturers who did not already have export business are scrambling to find some. In Monterrey, Mexico's third largest city and, with neigh-boring Saltillo, a major center of automotive production, the parts industry is ``very, very strong right now,'' said John Barrett, executive director of the Monterrey office of the Amer-ican Chamber of Commerce of Mexico.
The economic paralysis that set in after the December devaluation is starting to lift.
``Things are starting back to normal a little bit,'' Barrett said.
Some of the Mexican parts suppliers, especially those which have not developed export markets, have been badly hurt by the devaluation, Barrett said. American suppliers, in general, also have felt the effects of the economic downturn but remain committed to Mexico.
``A lot of American companies that have come to Mexico for the long term are going to ride this out,'' Barrett said.
In the first quarter of this year, Mexico's major automakers reported steep declines in sales of cars and light trucks for the domestic market.
A group made up of Chrysler, Ford, General Motors, Nissan and Volkswagen said vehicle sales were off 64 percent on average in the three-month period, to 56,251 units.
However, for the same group of companies, total car and light truck production, buoyed by an increase in exports, was off only 14 percent to 238,791 units in the first quarter, according to the Mexican Automotive Industry Association.
A rebound in domestic sales should begin by the third quarter, said Kimberly A. Smith, an analyst with J.D. Power and Associates in Troy, Mich.
The marketing research and information firm projects total car and light truck sales in 1995 of 325,595 units, down 41 percent from a relatively soft 1994.
But Smith noted that domestic sales are not likely to top 1993's total of 574,933 cars and light trucks until 1998.
``It's going to take quite awhile for the auto industry to bounce back,'' she said.
Mexican suppliers who are not involved in making parts for export vehicles are in a bind.
``They're really suffering,'' said economist Kaye Husbands. ``They're the ones who don't have the capital to upgrade.''
Husbands, a professor at Williams College in Williamstown, Mass., recently spent two weeks in Monterrey studying the local auto parts industry. She is currently a researcher with the International Motor Vehicle Program at the Massachusetts Institute of Technology in Cambridge, Mass.
Although automakers and parts suppliers employ relatively cheap labor in Mexico, these companies are still required to compete globally in the areas of quality, delivery, service and overall cost of production, Husbands said.
Mexican suppliers, which often get high marks for process skills, may be working at a pricing disadvantage if their technology is dated.
``You've got to be competitive in world prices,'' Husbands said. ``You're not necessarily going to be cost competitive just because you're in Mexico.''