Beyond its strengths as a car manufacturer and exporter, Mexico has a dynamic market that has attracted numerous brands both for the light- and heavy-vehicle markets. “The automotive sector is without a doubt one of the main motors of Mexico’s economy,” said Guillermo Rosales, Director General of AMDA, at the sixth edition of Mexico Automotive Summit, held on Wednesday. Panelists met at Sheraton Maria Isabel in Mexico City to discuss the reasons behind this growth and the opportunities for brands in the local market.

“Mexico is a solid market that has attracted many brands,” said Gerardo San Román, Head of Latin America at JATO Dynamics. There are 42 different brands serving the light-vehicle market, which speaks to the country’s attractiveness. “Having all possible brands in Mexico speaks to a welcoming market, no matter the number of sales. The Mexican market is still attractive to all OEMs in the world,” said Mario Olea, former Director of Bentley México.

However, sales of light vehicles have been sluggish for the past few years. “This will be the third year in a row with lower light-vehicle sales. We have been unable to reach the numbers of 2017,” said Rosales. During the first nine months of 2019, Mexico sold 7.5 percent fewer vehicles than during the same period in 2018.

Although 2019 is seeing sales of all types of cars falling, there are still opportunities for the Mexican market, explained Rosales. However, there are significant challenges to address to achieve a recovery. Chief among them are loans to buy new cars. “Many major credit agencies are not taking risks and only giving loans to those who they are fully certain will repay them. The reason for this is the problems inherent in recovering a car after the buyer stops paying. Changing regulations to facilitate the recovery of the car will allow lessors to take on more risk,” said Fausto Cuevas, Director General of AMIA.

Illegally imported cars are another area of concern. Importing old, used cars, mainly from the US, has been a common problem for Mexico, explained Cuevas. “Importation of used cars also affects the sale of used vehicles in Mexico as it greatly lowers prices. It also discourages local car owners to sell their cars since they will get only a fraction of what it is worth. Addressing these two matters will allow us to strengthen sales of light vehicles.”

For heavy vehicles, the market has become increasingly open thanks to regulatory changes. “Mexico recently opened its market to European trucks thanks to regulatory changes. Several years ago, Mexico’s regulations were identical to those of the US but European norms are gaining strength in many countries in Latin America,” said Enrique Enrich, Managing Director of Scania Mexico. Opening the market to a larger number of players benefits customers first and foremost because it gives them more choices. An area that offers significant opportunities is delivery services, particularly for “the last mile,” which require a larger number of smaller vehicles, explained Elías Massri, General Director and Chairman of the Administration Board at Giant Motors Latinoamérica. “Instead of having a single 10-ton gas truck, it is more efficient to perform the last mile of delivery using several 3-ton trucks,” he said.

The increased acquisition of used cars must also be addressed in order to refurbish local fleets of all types of vehicles. Rosales stated that INEGI’s latest report indicated that 34 million vehicles circulate in Mexico, including cars, bicycles and buses. The average age of these vehicles is 17 years. “Due to their age and their emissions, these cars should be removed from circulation, which would allow for the growth of the light-vehicle market,” said Rosales.

Tagged with →  

Looking for something?

Use the form below to search the site:


Still not finding what you're looking for? Drop us a note so we can take care of it!

Visit our friends!

A few highly recommended friends...