Chocolate Car Imports, Regularization Up 52.7% Since 2019

The importation and regularization of used vehicles, known as "chocolate cars”, have increased by 52.7% from 2019 to May 2024, with over 2.5 million vehicles imported from the United States alone, according to data from the Mexican Association of Automotive Distributors (AMDA). 

Guillermo Rosales, executive president of the AMDA, expressed opposition to the policy, emphasizing concerns about environmental risks, market destabilization, and setbacks in domestic automotive production. Rosales highlighted that the influx of outdated technology from these vehicles sets Mexico's vehicle fleet back by up to a decade, hindering efforts toward modernization and the promotion of electromobility. "The current administration will conclude with a record number of vehicles regularized under any governmental administration. We are looking at more than 2.5 million vehicles, which perpetuates illegal traffic and contributes to infrastructure saturation and increased emissions," said Rosales.

Financially, the regularization effort has generated substantial revenue, with collections exceeding MX$5.3 billion (US$286 million) by the first quarter of 2024. These funds, earmarked for road maintenance and infrastructure development, underscore the financial impact but raise questions about the broader economic implications.

Geographically, Tamaulipas leads in vehicle regularization, with over 374,000 imports and revenues exceeding MX$937 million. Chihuahua and Baja California follow closely, contributing significantly to the overall revenue generated from vehicle imports.

Concerns have been raised about the importation of heavy-duty vehicles, which have seen an increase in recent months. Alejandro Osorio of the National Association of Bus, Truck, and Tractor Manufacturers (ANPACT) highlighted a 166% rise in imports during the first quarter, with some vehicles entering Mexico under conditions that fail to meet even basic environmental and safety standards. 

"The importation of these 'scrap' vehicles poses a direct threat to our manufacturing sector," Osorio warned. He emphasized the contradiction between stringent regulations governing new vehicles and the unchecked entry of substandard imports, which jeopardize both industrial productivity and environmental sustainability.

Rosales called for a reconsideration of current policies, arguing that continuing to incentivize the regularization of contraband vehicles under future administrations, such as that of Claudia Sheinbaum Pardo, would be unjustifiable. He highlighted the need for a regulatory framework that safeguards Mexico's automotive sector against the negative impacts of outdated vehicle imports.