While both vehicle sales and the loans to finance them have increased during the past couple of months, the sector is still grappling with a surge in illegally imported vehicles due to the lack of adequate sanctions. Should this trend continue, it could delay the recovery of the local automotive industry.
During the first two months of 2022 ,94,742 vehicles were acquired through auto financing , according to AMDA, representing 59.9 percent of the total commercialized vehicles. The financing of vehicles came mainly from brand financiers and banks. AMDA also reports that the importation of pre-owned vehicles increased by 81.3 percent during the same period.
“The vehicle market is experiencing an unexpected high demand for used vehicles. It is estimated that for each new vehicle sold, six pre-owned cars are commercialized,” said Victor Rojas, Director of Automotive Banking, BBVA Mexico.
This situation brings banks an opportunity to increase their loan services. Giving loans to a larger number of people helps to boost the economy of Mexican families and allows them to acquire what can be one of their most valuable assets, said Daniel Esponda, CEO, Odetta, to MBN.
Sales of new light vehicles recovered during Mar. 2022, growing by 19.6 percent compared to Feb. 2022. However, sales have not reached 2019 levels yet, remaining 19 percent below Mar. 2019. AMDA forecasts that 1.02 million units will be sold during 2022.
Between Jan. and Feb.2022, 45,205 units were legally imported from the US and Canada, representing 28.6 percent of the total vehicles sold during the same period. However, the sector is still grappling with numerous illegally imported vehicles, especially as recent policies aim to facilitate their regularization, warns AMDA. These vehicles keep entering the Mexican market because there are no adequate sanctions nor investigation processes to determine the status of the arrived units. Part of this problem is linked to the regularization of chocolate cars proposed by President Andrés Manuel López Obrador, according to industry experts.
“The Public Vehicular Register (REPUVE) has no ability to regularize illegally imported vehicles, from our perspective, it has been a failure because the problem continues to grow and more vehicles are continuously entering the market. There has not been a single action to stop this due to the lack of disposition from Andrés Manuel López Obrador to recognize the problem and rectify it,” said Guillermo Rosales, President, AMDA.
The decree to regularize these vehicles represents an obstacle for the recovery of the automotive industry and affects the formal market for used and new vehicles, said Rosales as previously reported by MBN.