Despite an Improvement in March, Auto Sales Remain Low

Following the worst month for light vehicle sales since 2012, the Mexican automotive industry saw a slight recovery in March after light vehicle sales increased by 19.5 percent month-to-month, rising from 79,598 to 95,199, reports INEGI.

In Feb. 2022, the industry’s recovery fell further behind. Although production in February increased 0.6 percent annually (reaching 240,479 units), sales and exports decreased, with the latter falling by 5.6 percent year-to-year. February’s disappointing sales represented a 3.9 percent year-to-year contraction but a 1.29 percent month-to-month increase.

February’s limited sales were largely the result of disruptions in the supply chain, among other factors, impacting the automotive industry. But even as these challenges continue, the sector made a significant stride toward pandemic recovery that allowed March to report the second highest number of sales in 12 months, shortly behind Dec. 2021’s 97,420 sales.

However, March’s year-to-year sales decreased by 1.2 percent from March 2021’s 96,319 sales, making it the seventh month with a year-to-year decrease during the past 12 months, indicates the report. INEGI’s report compiles information from the Mexican Automotive Industry Association (AMIA), Giant Motors Latin America and Oriental Automotives Picacho.

Altogether, 1Q2022 closed with 253,382 total sales, a 2.9 percent decrease from the 260,893 light vehicles sold during 1Q2021. This made for the fifth year light vehicle sales contract during the first trimester.

Although March’s numbers represent an increase from February, they are significantly low in comparison to previous years with the exception of March 2020 when the COVID-19 pandemic heavily restricted mobility and production.

Within sales, the Japanese brand Nissan continues leading the national market with 16,800 sales, making up 17.6 percent of light vehicles sales in March. Nissan is followed by General Motors with 13,801 sales or 14.5 percent and Toyota with 8,596 sales or 9.02 percent.

A main factor for the continued decrease of year-to-year vehicle sales is the increase in the price of new vehicles due to the country’s inflation. Because of this, Gerardo Gómez, Director, JD Power Consulting, predicts it will take the sector five years to reach pre-pandemic numbers as fewer expensive cars will be sold. The sector is also looking to incorporate more electric and hybrid vehicles into the market as a means of lowering the carbon emissions produced by mobility in the country. But electromobility adaptation, similarly to industry recovery, has a long road ahead.