Farmers’ protests see road blockades in Mexico impact automotive supply chains including plant closures
The formation of road blockades as part of farmers’ protests in Mexico has led to disruption in automotive supply chains as a result of limited access to vital infrastructure.
In October, farmers in Mexico began protests, demanding fairer pricing for corn. As part of these protests, road blockades were organised at toll booths and major roads across the country.
These blockades, organised by the National Union of Agricultural Workers (UNTA), restricted access to what Mexico’s National Chamber of Freight Transportation (CANACAR) described as “fundamental logistical corridors for the road transport of goods in Mexico”.
Automotive impact
The road blockades forced several OEMs in Mexico to suspend operations. According to reports, Audi was forced to temporarily suspend operations at its plant in San José Chiapa in Puebla. Similarly, reports in Mexico claim production was halted at GM’s Silao plant in Guanajuato for 24 hours, while Nissan temporarily paused operations in Aguascalientes and Mazda implemented a preventative shutdown of its plant in Salamanca.
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And it’s not just OEMs that have been affected. Operational interruptions were reported at tier one suppliers, including component manufacturer Denso and tyre manufacturer Pirelli.
Freight impact
CANACAR issued a statement of October 27, warning that the blockades threatened “serious economic repercussions” and logistical delays, as well as road congestion and safety issues.
“The delays caused by the halted transportation directly impact the distribution and delivery costs of various products, slow down national supply and harm the country’s exports, which are currently the only engine of the economy that maintains a good pace of activity, in addition to imports,” Eva María Muñoz, president of the Mexican Association of Freight Forwarders (Amacarga) was quoted as saying on the matter.
What happens next?
On October 29, the government of Mexico announced plans for a corn management and marketing system, a proposal which it said will give certainty to corn producers. In the days following this announcement, Mexico’s Ministry of Communications and Transportation (SICT) announced that protestors ended blockades at some roads and toll booths in Michoacan, Tlaxcala and Guanajuato. However, it noted that, as of October 31, some blockades remained.
This disruption is one of many to impact automotive supply chains in Mexico this year, with tariff uncertainty and semiconductor supply also affecting operations. Reports claim that, whilst the blockades were disrupting supply chains in Mexico, Honda halted production at its Celaya Auto Plant in Mexico for a different reason. This, officials have claimed, was instead because of a semiconductor shortage sparked by an internal dispute between chipmaker Nexperia’s Dutch headquarters and its unit in China.
This further highlights the need for resilience in today’s market in order for firms to maintain operations while mitigating disruption, sometimes from more than one event. This is especially true in Mexico, with next year’s review of the US-Mexico-Canada Agreement (USMCA) presenting a complex set of considerations for Mexico’s automotive industry.
