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Mexico’s automotive industry faced mixed results this week. The first Mexican electric-vehicle OEM started operations in Puebla this week and projects production of 100 vehicle for the rest of 2018 and 200 more for 2019. AMIA also projects Mexico could become the fifth-largest automotive producer on the planet by 2020 with an annual production of five million units. Internationally, the US proposal on rules of origin presented last week has faced a mixed reception. While some companies in the American Automotive Policy Council are in favor of raising regional content from 62.5 to 75 percent, AMIA and the Auto Alliance rejected the proposal. In lieu of this situation, the Mexican government has vowed to present a new proposal on regional content. Mexico’s top business institution, the Business Coordinating Council (CCE), says the treaty is already at a closing stage but the US must soften its proposal on rules of origin.
Do you know what each candidate proposes for the automotive industry? Check out Mexico Automotive Review’s 2018 Presidential Election: More Than Just NAFTA at Stake to find out what they are bringing to the table in relation with NAFTA, infrastructure development, wages and education.
Mexico’s Manufacturing Momentum
Production of Mexico-made Zacua electric vehicles starts in Puebla. The brand expects an output of 100 units in 2018 and 200 in 2019.
The Puebla government strives for attract the installation of a BAIC assembly plant and the production of a new SUV in the Volkswagen plant.
Hemaq to open an innovation center in Silao, Guanajuato in June. The company will develop technology for high-precision machining in this location.
Looking ahead, AMIA projects that Mexico could become the fifth-largest vehicle producer with an annual output of 5 million vehicles by 2020.
Approaching NAFTA 2.0
US automakers clash over US proposal on rules of origin. The Auto Alliance representing Volkwagen, BMW, Mazda, Toyota and others rejects the proposal while AAPC representing FCA, GM and Ford supports it.
Mexico to present its own proposal on rules of origin to increase regional content in NAFTA 2.0.
NAFTA negotiations are at a “closing stage” but concluding them will depend on softening the US proposal on rules of origin, says Juan Pablo Castañón of CCE.
JETRO-México says Japan will not stop investments despite NAFTA-related uncertainty. The Japanese automotive industry aims at doubling the national content in its production through local suppliers.
Contracting Sales Numbers
April was the 11th month in a row that auto sales have gone down. Last month’s 4.6-percent slide could be related to inflationary pressure and elections-related uncertainty.
In April, four FCA brands increased their vehicle sales in the Mexican market. Jeep reached the highest growth in sales with 855 sold units.