Heavy Vehicle Market Looking for Growth OpportunitiesTue, 09/01/2015 - 15:29
Q: Mexico’s truck sales are currently 37% below its record year 2007. What conditions have to be met in the market in order to return to that sales level?
A: The importation of used trucks from the US is an issue that can be improved, and is moving in the right direction. Additionally, the scrapping program could help us achieve this by increasing the destruction of old vehicles and incentivizing the purchase of pre-owned vehicles. The professionalization of owner operators will be another important factor for us. Providing SMEs with the right tools to enhance their administrative processes is one of the industry’s main challenges, as 50% of all trucks registered at a federal level are owned by this segment. Most small transport companies cannot obtain credit loans, and we must figure out the mechanisms for them to do so. More than 80% of Mexico’s transport companies own between one and five trucks, representing huge market potential for us if they renew their fleets.
Q: Which role can leasing play in the development of the heavy vehicle segment?
A: It is common for owner-operators to possess better equipped trucks than fleet owners, but without necessarily purchasing them. They usually have a leasing program, and they renew the truck every couple of years. The Mexican environment does not facilitate companies in obtaining leases because many of them are not able to get credit. Alongside that, there is the cultural misconception that you need to own the truck. It is not about passing on a truck to your children, but rather them inheriting a small running business. The program alliance for the professionalization of small transport companies will help us reach this, with the participation of CANACAR, CONATRAM, and ANTP.
Q: How are ANPACT and its associates supporting the development of SMEs in Mexico?
A: We are helping 100 small companies in Mexico City by providing them with 40 hours of business management training sessions and 20 hours of onsite consultation and training. We will give them one computer, some fleet management software, and a certificate that will prove the course compliance. This experience is focused on improving the management of the company, and, as such, companies will be able to improve their services, quality and revenue. Around 47% of these companies are already in the process of being certified, and we will continue this program throughout the year. Our associates, and their respective financial areas, will look into reducing the credit requirements for companies, or give them a more competitive interest rate. Focusing on credit availability, Financial National (NAFINSA) has told us that it could reduce the requirements to apply for a loan or credit for companies that have obtained their certification. There is a strong possibility that we will accomplish this soon.
Q: How will the Energy Reform influence the Mexican fuel market and transportation industry in the coming years?
A: Next year, multiple dispensers will be selling gasoline and diesel. The following year, the brands will be able to import their product, and by the third year, they will be able to set the price of their gasoline and diesel. This could directly improve the opportunities for the diesel consumer to obtain better prices. The Energy Reform is also destined to result in an increase in foreign investment in the energy sector, which will have a direct positive impact on the heavy duty vehicle market. Wherever there is infrastructure development, there is a demand for new trucks. We are yet to measure the impact the Energy Reform will have on our market, but we believe it will increase the possibilities of selling new trucks. When it comes to the implementation of new policies to stimulate the development and implementation of proper technology, the Mexican government has to approve any adaptations to NOM-044. This norm defines emission limits and engine characteristics, which have to comply with the NOXs and the particle matter restrictions. However, in order to improve industry regulations, we need to move to ultra-low sulfur diesel, in addition to diesel exhaust fluid (DEF). NOM-086 regulation defines the characteristics of this diesel. These aspects work toward ultra-low sulfur diesel availability, and as a result a reduction in Mexico’s emission levels. Whenever there is a change in regulations, there also need to be incentives for the acquisition of new technologies. The age of the vehicle will not matter if there are no incentives to buy new trucks; people will continue to import old trucks and buses from abroad, making competition contingent on cost