AMIA Urges Mexican Government to Incentivize Electromobility

Q: How has your vision as executive president of AMIA changed the association’s approach to the growth and development of the industry?

A: The organization underwent an internal restructuring to provide better support to our associates. We also approached different federal and state government agencies, the media and association chambers with the objective of continuing to work together to continue promoting the growth and development of the automotive industry and, therefore, the progress of the country.

Q: What is the outlook regarding the recovery of the Mexican automotive industry and the supply shortages?

A: The industry was highly affected by the economic crisis caused by the COVID-19 pandemic, which led to a sudden change in mobility. When the crisis started to come under control, the sector began recovering but the shortage of semiconductors has limited the offer available to consumers. We expect the sector will start a stable and permanent recovery in the second half of 2022.

Q: How is AMIA working to attract more local and foreign investment?

A: Investment attraction has always been one of our main priorities. We support our associates and look forward to working together with the government to promote actions that will facilitate the administrative processes that every business must make.

Q: Aside from nearshoring, how has USMCA boosted the automotive industry in Mexico?

A: USMCA has provided certainty in the relationship between the US, Canada and Mexico. It also offers trade facilities that have attracted investments to produce in Mexico and later export to the US. This has mainly boosted investment in the auto parts industry.

The country is also receiving strong investments from OEMs, generating trust among manufacturing companies and other industries. This is providing investors with certainty and reassuring them that Mexico is a good place to invest, with strong institutions and rule of law. Despite the challenges, Mexico is progressing.

Q: How has USMCA’s Rapid Response Mechanism worked to protect the best interests of

all parties?

A: It was necessary to include a chapter regarding labor in the USMCA. This mechanism has been effective and provides confidence. We have seen some cases that have been solved favorably, giving even greater certainty to the application of USMCA’s policies.

Q: Aside from its proximity to the US, what other factors make Mexico an attractive market to invest in?

A: Mexico offers qualified labor at a competitive price. The automotive sector in Mexico creates almost 1 million well-paid and direct jobs, which benefit over 3.5 million people. The automotive sector is important for the Mexican economy because it is the main attractor of foreign direct investment (FDI) and an important generator of foreign exchange.

Q: How is Mexico developing specialized talent?

A: There is progress in this field, but Mexico has a big area of opportunity in education and must upgrade its educational programs. This is fundamental for the growth and development of the country

Q: AMIA urged the government to incentivize the use of electric and hybrid vehicles to mitigate CO2 emissions. How will these facilitate Mexico’s transition toward electromobility?

A: The automotive sector has always been committed to the environment and its technological innovations are a clear example of that. We welcomed the Decálogo de Acciones (Decalogue of Actions) promoted by President Andrés Manuel López Obrador, but we believe that public policies are needed to incentivize the use of EVs. All players must collaborate: the government has to offer infrastructure and incentives, while private entities need to continue strengthening their EV offer. Policies are required to change consumer perceptions of Evs, which are the future of the automotive sector. We are asking the government to establish public policies and fiscal and non-fiscal incentives. Technological change will happen and Mexico risks being left behind if it does not take action now. We are a manufacturing and exporting country with a global leadership position that we want to maintain.

Q: How are cloud, 5G and changes in infotainment technology shaping consumer preferences and OEM offerings?

A: Before the pandemic, most purchases were made through dealerships and the pandemic has shifted consumer habits towards digital sales. Digitalization is also aligned with the future of vehicles. Electromobility is just one step but autonomous mobility is also in the spotlight. The transition toward vehicle autonomy is slower because it requires more research but some markets, such as the US, are beginning to use autonomous vehicles in different services. There are also trials to implement this technology in heavy vehicles.

Q: What are AMIA’s main strategies for the coming months and for the next two years of the López Obrador administration?

A: We will continue working with all the players in the federal government and open the doors to dialogue and permanent collaboration. We are willing to work with the government on all the issues that concern the automotive sector. We expect the government to continue creating confidence and certainty for investing.

The Mexican Association for the Automotive Industry (AMIA) is a civil association created in 1951 that represents the interests of vehicle manufacturers established in the country.