According to the U.S. International Trade Administration, Mexico is the seventh-largest global passenger vehicle manufacturer, producing about 3 million vehicles annually, three-fourths of which are exported to the United States.
AutoForecast Vice President Sam Fiorani said the North American market is so intertwined with products moving back and forth that border interruptions quickly affect many businesses.
“Disrupting the flow from factories in Mexico translates into lost sales at dealers and suppliers in the United States and Canada,” Fiorani said. “Those lost sales just snowball into more and more lost sales as customers look elsewhere for their business.”
The effects are being felt in dealerships hundreds of miles away.
U.S. deliveries of three key Nissan compact models were interrupted last month because of transport network disruptions on the southern border.
Nissan builds the Versa and Sentra sedans and Kicks crossover in Aguascalientes, Mexico. The models collectively accounted for nearly a quarter of Nissan’s U.S. sales in the year’s first nine months.
“There were issues with ... immigrants getting on the trains,” Nissan U.S. sales boss Judy Wheeler told Automotive News. “So they shut down rail service ... [affecting] our vehicles coming back into the U.S .”
A Nissan spokesperson declined to say how many vehicles were affected by the interruption.
Nissan’s vehicle exports to the U.S. from Mexico climbed more than 41 percent in the first nine months of the year compared with the same period a year ago, according to AutoForecast data.
GM, which builds pickups and EVs in Mexico, is “experiencing slight delays in shipping across the border,” spokesperson Kevin Kelly said, adding that the supply situation is improving.
Kelly declined to provide the number of vehicles affected.
Stellantis, which builds Ram pickups and Jeep crossovers in Mexico, is “closely monitoring the situation” at the border, spokesperson Jodi Tinson said.
The automaker is working with its transportation providers to “mitigate any delivery disruptions to our dealerships,” Tinson said, declining to elaborate on specific supply interruptions.
In late September, border crossing delays forced BRP, a Canadian off-road vehicle manufacturer, to briefly suspend production at three factories employing about 9,000 in Ciudad Juarez, a manufacturing hub across from El Paso.
“Due to the waiting times on the international bridges in Ciudad Juarez, we have had a significant reduction in the volume of units that we can export daily,” the Quebec company said in a statement.
Increased inspections and reduced hours at border checkpoints impact suppliers, too.
Butzel Long attorney Les Glick, who handles customs and border issues for Rassini SAB de CV, a major producer of suspension components including composite plastics parts, said the supplier had faced up to 12-hour delays in getting parts into the U.S. from its factory in Piedras Negras, Mexico.
Although its plant is just across the Rio Grande from its distribution center in Eagle Pass, Texas, because of the congestion from migrant traffic, Rassini had to divert its trucks to the less congested but distant border crossing at Del Rio, Texas
Ann Wilson, senior vice president of government affairs at supplier trade association MEMA, said the secondary inspections by Texas authorities at border crossings have raised the prospect of production shutdowns if parts don’t make it into the U.S. in time.
“We depend on North America to function as an economic self,” she said. “Parts cross the U.S.-Mexico and U.S.-Canada border all the time before the assembly of a vehicle, and this is slowing down the industry’s ability to do this.”
Wilson said MEMA has urged both federal and Texas state authorities to cooperate to “expedite truck crossings” as much as possible. It also has asked the White House to expand border crossing hours and keep crossings open seven days a week throughout the Southwest to ensure as many trucks as possible can cross and to allow transportation companies to explore alternate routes.
But finding new routes is easier said than done, partly because there might not be enough drivers, Wilson said.
“Truck drivers are running out of hours of service, and there’s an inability to move goods across the border because of that,” she said.
A fragile state
This week, the industry received welcome news when the Bridge of the Americas, linking El Paso to Ciudad Juarez, partially reopened to commercial traffic after a three-week shutdown.
However, Wilson said it is “questionable” how long they can keep that up.
The border situation adds further uncertainty for North American parts suppliers already in a fragile financial state because of the UAW strike against the Detroit 3. Wilson said slowdowns at the border would make it even more difficult for suppliers to quickly restart production after the strike ends.
“Everybody is going to want to ramp up production as quickly as possible, but if the supplier network is unable to do that, it’s a serious problem,” she said.
Automakers and suppliers are considering alternatives. Wilson said that manufacturers are taking the “extraordinary step” of airlifting components over the border.
GM is transporting vehicles to the U.S. via sea “on a limited basis,” Kelly said.
Nissan also has turned to cargo ships to get vehicles from Aguascalientes, in Central Mexico, to primarily the U.S. East Coast, Wheeler said.
“We’re using vessels because there’s not enough rail carriers to meet the demand for all the manufacturers. So you have to find solutions,” Wheeler said.
According to a Mexican media report, one of those cargo ships, the Grande Senegal, ran aground near the seaport town of Sisal on Mexico’s east coast while en route to Germany from Altamira, Tamaulipas.Butzel attorney Glick said maritime transport is a creative way to get around land-based border crossing delays.
“There are some deep-water ports near the border — Matamoros on the Mexican side and Brownsville on the U.S. side — that would lend themselves very well,” Glick said.