Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Volkswagen Mexico has announced it will resume operations at its plants in Puebla and Guanajuato on June 1, while Toyota plans to begin its operations in the country this week.


Volkswagen indicated in a statement on Moday that it will establish the necessary elements to guarantee a stable supply chain, adding that its program to resume activities will take place only after ensuring strict hygiene measures at its plant.


Toyota plans to resume production in US, Canada and Mexico this week, while General Motors Mexico has indicated it is waiting for the Mexican government to announce its plans to reopen the automotive industry before giving a timeline.


The reopening of car factories in Mexico can’t be too soon for the country’s scrap industry that is reeling under tight supply after temporary suspensions of these plants began in March and April.


A manager at a Bajio based recycler told Davis Index that the scrap industry is waiting for the car assembly plants to restart activities to help scrap supply flows.


However, the shortage of scrap could intensify in the coming weeks as the automotive industry will be slow to generate scrap immediately even after it restarts operations.


On Monday, Mexico’s president, Andrés Manuel Lopez Obrador, said that the government will announce a plan to reactivate the economy this week. The automotive industry’s restart is expected to be part of these announcements.


The US automotive industry is also closely monitoring the Mexican auto industry’s restart timelines as the former can’t resume operations if parts suppliers in Mexico remain shut, according to media reports.

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