Mexico is finally bringing some clarity to its position in the NAFTA 2.0 negotiation. The country proposed a 70 percent local content rate for vehicles to be eligible for exports without paying tariffs. If this proposal were accepted, regional content would increase 7.5 percent from its current rate. Mexico did not include a high-salary clause as the US did in its last proposal on that matter.
Mexico’s automotive exports grew in April without considering Nissan’s figures. The company, which amounts for up to 25 percent of the country’s light-vehicle exports, did not report its exports to AMIA for the first time. In the production side, Ford’s operations in Mexico keep on plummeting. See why in our latest blog analysis.
Rev your engine, here’s your weekly news roundup:
MEXICO’S PARTICIPATION IN NAFTA MODERNIZATION TALKS
Mexico presents proposal with a 70-percent regional content rule of origin and no salary clause during the negotiations of NAFTA 2.0.
An increase in regional content would boost Mexico’s production capacity. Raúl Feliz of CIDE says if approved, Mexico’s proposal would also promote economic integration in North America.
A solution for the automotive impasse within negotiations is expected by May 11, 2018. According to Eugenio Salinas of CCENI, once rules of origin are settled, negotiations will move toward other thorny topics.
AUTOMOTIVE EXPORTS AND GREEN-CAR SALES
Sales of green vehicles grew 69.8 percent in February compared to the same period of 2017. Mexico City is the largest market for hybrid and electric vehicles.
In April, 2018, automotive exports from Mexico grew 8.1 percent without considering Nissan’s figures, which were not reported to AMIA but usually account for a quarter of the sector’s exports.
MEXICO’S AUTOMOTIVE ALLURE
Guanajuato, Chihuahua, Nuevo León, Sonora, Puebla, Hidalgo, Yucatán and Coahuila are among the candidate states where BAIC could place its future US$2 billion assembly plant.
Faurecia trusts the growth of the automotive sector in NAFTA and continues to bet on Mexico. The company has invested US$200 million in Mexico in the last three years.
Fiat-Chrysler is not abandoning Mexico. The company has shifted its truck production from Saltillo to Michigan to make space to build commercial vehicles for global exports in its Mexican assembly plant.
Héctor Pérez will take over as the new President and CEO of Ford México. The company’s production in the country dropped 31 percent in April as the automaker prepares to stop selling sedans in the US.