NAFTA again dominated this week’s news. While it seemed that agreements on NAFTA’s thorny automotive issues were closer as the US reportedly dropped its demands for 50 percent US content, a new stalemate was reached as the country presented a proposal to include a US$15 wage floor for vehicles eligible for duty-free trade and the POTUS threatened to send the US national guards to secure the US-Mexico border. Find out more in MAR’s “NAFTA’s New Enemies: Salaries, Immigration”.
Bosch has announced the opening of a new corporate building in Guadalajara, but what does the company expect from Mexico’s automotive industry? Check out our exclusive “A Clean Future for the Industry – Interview of the Week” with René Schlegel, President of Robert Bosch Mexico to learn more.
Ready to hit the road? Here’s your weekly dose of automotive news.
International Trade Ups and Downs
Japan takes the first step to ratify CPTPP by presenting it before the National Diet for approval. Days later, CPTPP reached the Mexican Senate for approval and ratification.
While Mexico has plenty on its plate to negotiate as the country takes part in the definitory rounds of NAFTA, FTA EU-MEX and ACE53, the US has proposed the inclusion of salaries in the calculation of regional content in NAFTA. Mexico would not be able to produce around 30 percent of regional content value if this proposal on salaries is adopted. Ildefonso Guajardo said the three governments are discussing the salaries proposal and that the Summit of the Americas could be a good space to boost NAFTA. On the other hand, instead of there being an eighth NAFTA negotiation round, Mexico, the US and Canada agreed to have a ministerial round in Washington.
The Mexican automotive industry called for stricter controls on the importation of used vehicles from the US. AMIA and AMDA called for candidates not to use the regularization of these vehicles as a political tool to gain votes. Meanwhile, representatives are drafting a series of petitions for presidential candidates.
EVs, New Technologies and Emissions
Tesla’s share value dropped five percent prior to the presentation of the production statistics of Model 3. The company has vowed to reach a production level of 2,000 Model 3 sedans per week. Model 3 already is the top-selling EV in the US with 8,180 Model 3 units sold in 1Q18.
Nissan LEAF was awarded the 2018 “Green Car of the Year” award in the New York International Auto Show.
Audi developed an e-gasoline that does not contain oil and has lower pollution levels.
The head of the US EPA presents a process to weaken current emissions standards in the US looking to make new vehicles more affordable, which spurred controversy among environmentalists. However, several US states vowed to defend and uphold federal automobile efficiency standards.
Mexico’s Automotive Capabilities
Automotive Cluster of Queretaro grew its membership by 458.3 percent since 2013. Additionally, Continental will open 400 vacancies in the area of research and development in its Queretaro and Jalisco facilities.
After experiencing an unexpectedly fast growth in its Jalisco operations, Bosch will invest MX$220 million in a corporate building in Guadalajara.
Car sales in Mexico experience 10 consecutive months of deceleration in March as they fell 13.4 percent year-on-year. However, Kia Motors increased its sales to become the fifth top vehicle seller in this market.
The cancellation of a Ford plant in San Luis Potosi did not damage the region’s manufacturing activities.
In terms of new production and commercialization processes, SEAT considers bringing the production of one of its models to Volkswagen’s Puebla assembly plant and the BAC Mono single-seater sports car arrived for the first time to Mexico.
Mercedes-Benz delivered 90 Toreto-type buses to be used in Mexico City.