Summary The motor industry has played a key role in industrial restructuring in Mexico. Export‐oriented investments in the North of Mexico have transformed the industry, shifting production away from central Mexico and altering the relation between the Mexican and US motor industries. The new plants have applied JIT/TQC intensively. Many suppliers to these plants are located within a radius of one kilometre. The impact of JIT/TQC is uneven. The largest suppliers of parts are often multinationals who have relocated to Mexico together with the US assemblers. They provide the most complex component systems and they have implemented internal JIT/TQC and automation most extensively. Smaller companies and Mexico firms find it hard to enter JIT/TQC relations because they lack international contacts and need to greatly upgrade their facilities in order to meet new standards of quality, reliability and delivery.