Photo by Volkswagen

Even though US President Donald Trump is boasting about his new agreement with Mexico, there are still issues to be resolved and industry leaders are still expecting Canada to define its position regarding the potential agreement and how it will impact its final outcome. Any agreement is yet to materialize.

Uncertainty might still loom over the industry but results have been strong nevertheless. Production continues to increase gradually and exports have boomed even without Nissan’s numbers, which the company stopped reporting in April.

Want to know what else happened over the week? Keep straight ahead! But before you continue, don’t forget to check out the highlights from Mexico Automotive Summit 2018 held at Sheraton Maria Isabel in Mexico City on Wednesday.

It Is Not Over Yet

Although Trump is pushing for an agreement with or without Canada, US Congress still has to approve it before signing. Moreover, even though there is already an understanding between Mexico and the US, this does not equal a terminated agreement nor a trilateral agreement for NAFTA. “We aspire for a trilateral agreement and once Canada defines its position, we will have a clear position on what is going on in North America,” says Eduardo Solís, Executive President of AMIA.

According to José Luis de la Cruz, Director of the Institute for Industrial Development and Economic Growth, the new rules of origin agreed with the US based on salaries will lead to employment losses unless Mexico manages to produce more intermediate products that are currently imported from outside North America.

Rules of origin were strengthened in the heavy-vehicle sector as well but resulted in a more flexible standard of 70 percent local content against 75 percent in the light-vehicle segment.

Production Climbs Against Headwinds

In Mexico, production keeps climbing albeit slowly. Between January and August 2018, production numbers rose 0.1 percent against 2017. However, exports grew 9.1 percent during the same period, even without numbers from Nissan, the largest exporter in the country.

Even with the reduction in production output from Honda, which fell 79 percent in August 2018 compared to 2017, Toyota and Kia’s increase in production operations of 41 and 29 percent respectively managed to keep the industry’s numbers rising.

Goodbye to an Old Favorite

After three generations and 70 years of sales, Volkswagen announced the end of production of the Beetle. The brand will say farewell to this model with two commemorative versions.

Don’t forget to follow us on twitter at @mexautomotive and @mexautomotriz for the latest industry news.

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