2025: Automotive Financing, Economic Context, and Electromobility

The positive data for automotive financing in the last year have been overshadowed at the start of 2025 by the new US administration and the impact it has had on the Mexican consumer confidence index. However, the automotive sector is growing and is doing so driven by the increase in the supply of brands and models, many of Chinese origin, as well as the push for the green car segment, which will be a priority in the next six years to achieve the objectives set by both the government and the industry. 

Over the past year, we have seen the growth of automotive credit in the country, which is experiencing one of its best moments. By the end of 2024, according to the Bank of Mexico, the growth of bank financing via credit for the acquisition of vehicles had an annual growth of close to 50%.

Regarding the total financing reported by the Mexican Association of Automotive Distributors (AMDA), from January to November 2024, a total of 932,203 placements were recorded, which represented an increase of 13.7% compared to 2023, equivalent to 112,269 additional units. The performance of new vehicle placements had an increase of 15.1% and in the case of placements of used vehicles, an annual increase of 6.1% was observed in the same period. 

This same organization reported that from January to June 2024, of the total units acquired in the country, 64.4% were done through some financing, a figure higher than in 2023 where the financed units were 60.7%.

Among the factors that favored this result are the increase in the offer of brands and models with more than 20 new automakers that have arrived in our country from China in recent years, as well as the boost in the placement of green cars, which already represent more than 7% of sales in Mexico, and the establishment of alliances by financial institutions and automakers. 

Economic Context: Inflation, Rates and Confidence Index

This year began with positive data regarding the economic context. The reduction in inflation and interest rate cuts stimulate economic activity and demand.

Mexico's annual inflation rate eased for the second month in December 2024, hitting a nearly four-year low of 4.21%, down from 4.55% in November and below market forecasts of 4.28%. On the other hand, the Bank of Mexico made the decision to lower the benchmark interest rate for the fourth consecutive time, setting it at 10% in December.

However, the result of the elections in the United States had an impact on the confidence index that INEGI has reported monthly for 20 years. In January, the index fell 0.3 points compared to December 2024, standing at 46.7 compared to 47 the previous month. According to analysts, this is due to the growing concern of the population about the economic policies of the new administration of Donald Trump. 

Still, it is important to note that, in October 2024, this indicator posted a record high since 2001, standing at 49.4 points. 

Status of Electromobility in Mexico

As cities and their populations grow, so has concern for mobility and efficient, low-environmental-impact transportation. This month, the consulting firm TomTom, which specializes in geolocation, published its annual study analyzing vehicle traffic in 500 cities in 62 countries. For the first time, Mexico City tops the world ranking of cities with the most traffic. According to the study, in the Mexican capital, an average of 152 hours a year are lost in traffic jams, which is equivalent to working 19 days straight without a break. This situation has a direct impact on both productivity and the economy. 

Given that this situation is the result of a poor public transport proposal and a growth in population density, which will continue in the future, it is essential to take strong and effective measures for the gradual transition to electromobility. 

In 2018, the National Electric Mobility Strategy in Mexico was concluded, with which the government proposes that by 2030, the 10 cities that contribute the most to the generation of greenhouse gases and polluting particles in the country have at least one public transport component with electric technology. It also seeks to promote the automotive industry for the production of green vehicles and encourage their purchase and use. 

According to EMA (Electro Mobility Association), created in March 2024, which groups and represents all private actors and civil society in the ecosystem, there are two elements of great importance that must be improved in parallel with the production and sale of green units. One is the development of comprehensive regulations that encourage the adoption and education of these technologies. On the other hand, there is a need for the development, installation, and operation of an adequate and sufficient charging infrastructure. 

Currently, the public infrastructure network only has 3,321 charging stations and the private network has 45,055 stations. The consulting firm Roland Berger estimates that to launch an efficient public charger network in Mexico, an investment of close to US$10 billion is needed until 2030, with the aim of having more than 30,000 charging stations by then.

According to data from the National Energy Control Center (Cenace), the number of electric vehicles is projected to reach 17,780 by 2037 – that is 5.4 times what is currently available – popularizing this mode of transportation. EMA indicates that the Olinia plan announced by Claudia Sheinbaum to manufacture and market mini-electric cars for the government must be accompanied by a policy of industrial development, promotion of charging infrastructure, and generation of clean energy and talent.