Mexico sees big boost in vehicle sales

By Stephen Downer, Special to Tire Business

MEXICO CITY – The automotive industry sold a record 1,603,672 light vehicles in Mexico in 2016 – 252,024 units, or 18.6 percent, more than in 2015.

The sales surge comes as U.S. President Donald Trump pressures OEMs to invest in the U.S. rather than in Mexico and Canada, all three co-signatories of the North American Free Trade Agreement (NAFTA), which was signed into law by President Bill Clinton on Dec. 8, 1993, and took effect on Jan. 1, 1994.

The stronger a company's performance in overseas markets, the likelier it is to resist the new American president, Mexico's auto industry leaders reason.

Forty-five percent of the cars sold in Mexico were assembled in that country, according to industry body the Asociación Mexicana de la Industria Automotriz AC (AMIA).

It said OEMs built an unprecedented 3,465,615 vehicles – 66,539, or 2 percent, more than in the previous year. They exported 2,768,268, which is 9,372, or 0.3 percent, more than in 2015.

The U.S. imported 77.1 percent of the total. In 2015 Mexico exported 1,993,162 units to its northern neighbor. That figure increased by 7.1 percent, to 2,133,724, in 2016.

Separately, GM subsidiary General Motors de México S. de R.L. de C.V. said it sold more cars and light trucks in Mexico in 2016 than in any other year. It has operated in Mexico for 81 years.

The unit's 2016 sales totaled 308,624 vehicles, 52,474 – or 20.5 percent –  more than the previous year, for a 19.2 percent market share.

All four GM brands available in the country broke records, said Francisco Garza, the subsidiary's vice president for sales, service and marketing.

Chevrolet's sales were up 20.7 percent, GMC's by 18.1 percent, Buick's by 1 percent and Cadillac's by 2.1 percent, according to Mr. Garza.

“We ended 2016 with the best results in volume terms in the history of General Motors in Mexico,” he said.

The auto maker employs 15,000 at manufacturing plants in Toluca, Silao, Ramos Arizpe and San Luis Potosí and at the company's corporate offices in Mexico City.

According to Toronto's Globe and Mail, Wilbur Ross, Mr. Trump's pick for commerce secretary, will give priority to the NAFTA issue.

Citing Canadian government officials, it said Mr. Ross “indicated (that) a formal notification letter to open negotiations on NAFTA” would be sent to Canada and Mexico within days of Mr. Trump's inauguration.

Mr. Trump who described NAFTA as the “worst trade deal” the U.S. has signed, has spooked both OEMs and suppliers alike by threatening to impose a 35 percent tariff on imports from Mexico and even to scrap NAFTA altogether.

“Next year (2017) presents many uncertainties, the new U.S. government being one of them,” Thomas Karig, Volkswagen de México's vice president for corporate relations, said in December.

According to the Globe and Mail, U.S. officials have said they “want to discuss country-of-origin rules,” a reference to NAFTA's 62.5 percent content rules covering vehicles shipped duty-free to the U.S.

Stephen Downer is a Mexico-based freelance writer who covers that country and Latin America for Tire Business and its Latin America e-newsletter.