Image credits: Kifah Meeran
News Article

Heavy-Vehicle Production, Wholesales Interrupt Recovery

By Alejandro Enríquez | Fri, 09/11/2020 - 12:34

ANPACT announced that during August, vehicle wholesales and production stopped the recovery trend seen in the previous months. "To reach a production recovery it will be necessary to reactivate the internal market, which requires a legal framework that motivates fleet renovation, as well as to speed up procedures such as matriculation of new units," said Miguel Elizalde, Executive President of ANPACT on a statement.

Heavy-vehicle production reached 12,866 units in August, which meant a year-on-year 30.4 percent drop. Accumulated production in 2020 accounted for 83,967 units, below the 143,207 units produced in January-August 2019, a 41.4 percent drop. When it comes to exports, August saw a 32.2 percent year-on-year decrease with a total of 11,160 units exported. Accumulated exports in 2020 dropped a 41.1 percent compared to 2019 for a total of 70,165 exported units. Compared to July, exports did increase by 11.4 percent. Mexico's top export destination remains the US but vehicles produced in the country reach 32 different markets.

"Despite the slight production recovery due to a gradual exports increase, the internal market is giving signs of a slower recovery. In fact, August showed a monthly sales drop compared to July, which interrupted the recovery trend seen as the economy was reactivated," said Elizalde.

Mexico's domestic heavy-vehicle market saw a 20.9 percent year-on-year increase in wholesales in August. However, it suffered a 20 percent drop compared to July 2020 with only 2,050 units being sold. In accumulated figures, wholesales suffered a 51.7 percent drop.

According to ANPACT, local demand for heavy vehicles has dropped considerably since 2019 and this trend was accelerated during the pandemic. It also highlights the additional costs transportation companies undertook to adapt to the new normal, which makes fleet renovation more complicated. The industry association sees great opportunities in USMCA and US economic recovery for exports to continue driving the sector's recovery and to start oiling different supply chains and thus, transportation.

Elizalde wrote in his Expert Opinion op-ed for Mexico Business News that freight and passenger transport have proven to be essential for the economy. “To reduce the upcoming impact of the economic crisis and move toward a full reactivation, it will be essential to have competitive transport that allows goods to reach their final destination under the best conditions: reducing transfer times, avoiding failures and setbacks. Regarding passenger transport, it will be increasingly important that the routes are covered under conditions that promote passenger hygiene, safety and health."

You can read Miguel Elizalde's expert opinion here

Photo by:   Kifah Meeran
Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst