Foreign direct investment (FDI) in Mexico's automotive industry plummeted by 41 percent year on year in the first half of 2025 under the tariff chaos and an economic slowdown, according to government figures.
The country attracted approximately 3.6 billion U.S. dollars in auto investment from January to June, a significant decrease from around 6.1 billion U.S. dollars during the same period last year.
At the International Congress of the Automotive Industry in Mexico earlier this month, the atmosphere was grim among leaders of the automotive sector, which employs over one million people nationwide.
"There are very few new projects this year compared to previous years, when new factories and assembly lines were opening up regularly. The atmosphere is cautious. It seems like everything is on standby," said Lazaro Garza, Sales Director of Mapal, a machine manufacturing company.
The slowdown in nearshoring is attributed to the looming North American free trade review in 2026, according to Maria de Haas, International Relations Director of the Mexican Economy Ministry.
"It's uncertainty, which always causes fluctuations in investment, nothing more. Mexico has everything that foreign investors need," she said.
In her keynote speech at the event, De Haas tried to alleviate concerns among industry leaders.
"Integration is key. We need closer ties between Mexican, U.S. and Canadian associations. That's the best way to defend free trade and avoid tariffs," she said.
However, as global supply chains evolve, the competition for FDI is intensifying.
"Attracting international industrial investment is tough, with Costa Rica, with other Asian nations, and even now with the United States. So Mexico is now competing for investment with entire global regions -- not just rival states at home," said German Rivera, Executive Director of the Center for Investment and Trade of Sinaloa.
FDI in Mexico's automotive sector plummets amid tariffs, economic slowdown
