Abstract
One of the major impacts of the ongoing global downturn has been the weakening
of consumer
confidence in the economic system, and BMI sees a direct
reflection of this in the automotive
industry. In case of Mexico, as
examined in BMI’s latest Mexico Automotives Report, the demand
conditions in the US will continue to have an adverse effect on vehicle
exports, and as a result,
Mexican car production.
According to
estimates from Mexican manufacturers’ association, (AMIA), production
fell by 38.2%
y-o-y to 107,547 units in February. This took total industry
output to 340,036 units, 44.4% lower than
the first two months of last
year. Production was hit by a 52.3 % year-on-year (y-o-y) fall in demand
from its main exporting destination, the US, as well as by a domestic drop of
nearly 29% y-o-y to
183,839 units in the period. Any hope that demand from
the European, Asian, and Latin American
market would help to offset the
loss of business in the US took a severe blow as export demand also
plunged dramatically.
We believe that contraction in the extension of
credit will prove to be the most discouraging factor for
prospective
buyers. Meanwhile, the pace of Mexico’s economic downturn, as observed
in Q109, has
encouraged us to downgrade our 2009 real GDP growth forecast
to -5.5%. This has prompted BMI to
take a more serious stance on the
domestic demand in Mexico as we now forecast a 15% y-o-y drop in
vehicle
sales this year. In the longer term, we expect a complete recovery in domestic
sales, which
should take demand up to nearly 1.13mn units by end -2013. In
terms of production, BMI agrees with
the general consensus that there will
be a 20% y-o-y drop on the back of an anticipated 30% y-o-y fall
in
exports.
Nevertheless, Mexico retains its position as a competitive market
with strong growth potential. In line
with this view, Daimler Trucks North
America LLC, the commercial vehicle subsidiary of Daimler
AG in North
America, has opened a new manufacturing plant in Saltillo, north-east
Mexico.
Amongst the major industry players, General Motors (GM) regained
its position as a clear leader in
the region. Its sales reached 508,748
units and pushed 2007’s production leader Nissan Motor to
second
place. Volkswagen de México, on the other hand, announced record
production figures, with
output reaching 449,096 units and 21.5% of the
market, almost the same as Nissan. In terms of sales,
carmakers compete
aggressively to dominate market share. Renault’s Chief, Carlos Ghosn,
has
revealed the company’s strategy to expand the role of its
Mexican subsidiary. More models will be
built by Renault in Mexico in the
future, and the firm expects the market in the country to ‘get back
and grow’ relatively quicker than in other places.
| 
View Cart
