President Donald Trump at G20 Summit by The White House. Public Domain Mark 1.0

On Wednesday, Mexico took another step toward renewing its commercial relations with the US and Canada. With 114 votes in favor, the Mexican Senate approved USMCA and sent it back to President López Obrador for ratification. According to the Ministry of Economy, USMCA will bring certainty for investors to continue supporting trade as a motor for growth and development. CANACINTRA added that this will boost the reactivation of investment projects that were put on hold.

But the devil is in the details and Mexico’s transportation sector is not particularly happy with USMCA’s terms. Just like in 1994, Mexico’s transportation companies will be at a disadvantage against their US counterparts because no new permits to do long-haul journeys within US territory will be awarded and those in existence could be cancelled. According to Enrique González, President of CANACAR, 3,800 Mexican transportation companies operating 400,000 vehicles used in short distance transport at the US-Mexico border will be impacted.

In local news, San Luis Potosi expects a 9.2 percent increase in its exports thanks to the recently inauguration of BMW assembly plant in the state. Additionally, Bosch and Cummins are supporting the adoption of Industry 4.0 practices and Mexican heavy-vehicle retail sales increased in May. Mexican supplier Metalsa won a tender to work in the chassis of the electric version of the Ford F-150 pickup, while Grupo Alfa, Nemak’s parent company, keeps negative expectations for FY19.

The road is clear. Go ahead!

Closer to a New Trade Environment

On Wednesday, the Mexican Senate approved USMCA and sent it back to President López Obrador for ratification. According to Minister of Economy Graciela Márquez, this sends a message of certainty to investors, consumers and producers to bet on the Mexican economy.

According to CANACINTRA’s Queretaro chapter, USMCA’s ratification offers certainty to investors and boost the reactivation of investment projects currently on stand-by.

BMW by Christian Flores. CC BY-SA 2.0

According to CANACAR, Mexico’s transportation sector is at a disadvantage under USMCA regulations. No new permits for Mexican transportation companies to offer long-haul services beyond the border will be awarded and those in existence may be cancelled.

Mexico’s Automotive Drive

Thanks to BMW’s local assembly operations, San Luis Potosi expects to increase its exports by 9.2 percent in 2019.

Cummins works with the Ministry of Economic Development of San Luis Potosi to boost the digital transformation of manufacturing processes.

Automotive supplier Bosch boosts the Industry 4.0 trend by building a fully automated manufacturing facility connected to a global network.

Laguna Automotive Cluster (CAL) was present at the Paris Air Show to showcase the strengths of the Comarca Lagunera region before potential clients.

Data of ANPACT shows heavy-vehicle retail sales increased by 10 percent in May. Over 3,700 units were sold in that month.

Bosch Symbol by Sören. CC BY-SA 2.0

Renault México bets on commercial van Kangoo and mini-SUV Kwid to increase its sales by 16 percent in 2019.

 

Uncertainty Challenges and New Technologies

Uncertainty has taken a toll on Mexico’s vehicle leasing sector. According to AMAVE, lack of clarity on economic policies has caused companies to be extra cautious with their investments.

According to Signum Research, Grupo Alfa, Nemak’s parent company, is expected to close with negative results in FY19 as the company focuses on longer-term gains.

Ford and Volkswagen Group could finalize their partnership to develop new technologies for e-mobility in July.

Metalsa won a tender to work in the chassis of the electric version of the Ford F150 pickup. The company already works with Ford and Rivian in the development of chassis for EVs.

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

 

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