Auto Sales Expected to Fall Above 90 Percent in April: AMDABy Alejandro Enríquez | Tue, 04/07/2020 - 13:02
AMDA held yesterday its first joint virtual press conference with AMIA. Both associations presented March’s results, highlighting the annual 25.5 percent drop not seen since 2009. AMDA expects April and May to have more than a negative 90 percent annual variation and the market will start to see positive annual variations until November or December 2020. AMDA adjusted its sales forecast for April, expecting just 7,832 units to be sold and a forecast of less than a million units to be sold in 2020, a negative 25.5 percent annual variation.
AMDA explains major economic indicators reflecting customer's trust have been declining as well. The Consumer Trust Index’s variable “willingness to acquire durable consumer goods” shows an annual variation of negative 5.2 percent. Business trust in the transportation equipment segment has also fallen a 20.5 percent compared to March 2019, while it has dropped 15.8 percent in the transportation equipment segment.
Private sector proposals have not been heard by the government." -Guillermo Rosales.
Guillermo Rosales, AMDA’s Executive Director, highlighted the government has not taken action to help companies to cope with the situation. "Private sector proposals have not been heard by the government and we will see a scenario where companies and workers will have to come up with their own ideas to cope with the economic crisis that is coming."
According to Rosales, there has been a really close relationship between dealerships and OEMs to have a common response towards the situation, including special plans to pay for stock. He pointed out that most dealerships remain closed at the sales floor, but they remain open for maintenance as well as through digital sales channels.
In addition, AMDA is concerned with the fact that used-vehicle imports increased 14.2 percent in the first two months of 2020 compared to 2019. “We see with great concern the intention of Baja California's government to carry on with its plan to legalize used-car imports in the northern border amidst the scenario we are living and considering that federal authorities have turned a blind eye on the matter,” said Rosales.
AMIA Awaits a Recovery in US’ Demand
Fausto Cuevas, AMIA's Executive Director, announced an 11.9 percent drop in exports, where North America and Latin America presented a negative annual variation. Notably, exports to Europe and Asia grew 17.3 percent and 64 percent, respectively. Exports to the US fell a 5.8 during 1Q20 compared to the same period of last year.
Referring to the production scenario, Cuevas said that "operation suspensions in production plants will continue throughout April. We do not have a clear scenario of what is going to happen in May given that production in Mexico is directly linked to the US market. If the situation changes in the US by May, Mexican production will start to cover those needs. But we do not have any certainty. Mexico has to be ready for when demand in the US recovers.”