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Weekly Roundups

Industry Challenges, Electrification Continue

By Alfonso Núñez | Wed, 03/02/2022 - 14:25

Industry challenges continue arising in the automotive sector as logistics delays prevent it from reaching full manufacturing capacity. Meanwhile, President Andrés Manuel López Obrador’s chocolate decree continues expanding across states, further worrying local automakers. Despite the challenges of 2021 the Mexican auto industry was able to set a record for FDI and its performance is leading global manufacturers to further rely on Mexican workforces for their operations. Meanwhile, the adoption of electric technology by Mexico’s transportation system is spreading to the bus system, presenting financial opportunities for companies across the country.

 

The Week in Automotive:

Auto Industry Performs at 55 Percent Capacity

Grupo MAEN reported that the automotive industry has only been able to perform at 55 percent of its full capacity thus far in the year. The ongoing global shortage of semiconductors was worsened by logistics delays caused by the congestion of Asian ports. Climate challenges in North America further halted both maritime and terrestrial freights. This delay is expected to continue for the coming months, delaying the industry’s expected recovery.

Regulation on Chocolate Cars Expands to Sinaloa, Zacatecas

President Andrés Manuel López Obrador’s controversial “chocolate” car decree originally only affected states at the US-Mexico border but it continues to expand across the country, now including Sinaloa and Zacatecas. AMDA’s Executive President Guillermo Rosales continues speaking out against the decree, warning of the negative impact it will have on the recovering industry. 

New Generation of Buses to Arrive in Mexico

The Mexican bus ecosystem is electrifying itself to keep up with the latest technological advances and provide customers improved services. Since last October, Mexico has welcomed 10 Chinese BRT e-buses into its public transportation system. The further adoption of this technology, as well as the domestic production of buses, will be discussed during Mexico Automotive Summit 2022 on March 23-25.

Auto Sector Sets FDI Record

Although the industry faced a staggering roadblock in its path towards recovery in 2021 due to the unexpected semiconductor crisis, the Mexican automotive industry was still able to set a record for attracting investment during the first full year the USMCA was enacted. Manufacturing was the largest source of FDI, followed by mining and financial and insurance services.

Mexican Companies Will Drive EV Adoption Forward

French automobile manufacturer Renault expects the electrification of Mexico’s automotive industry to be led by businesses. The price of electric and hybrid models in Mexico currently categorizes them as luxury vehicles but companies might see their ROI in as little as three years due to fuel savings. However, the lack of chargers in the country continues to be a challenge for the adoption of this technology.

Mazda, Mitsubishi Bet on Mexican Production

Japanese automakers Mitsubishi Motors and Mazda Motors are recognizing the potential of the Mexican market following a successful 2021. Both companies are increasing their production goals and the number of models manufactured in the country. Mitsubishi will strengthen the regional presence of several of its models while Mazda will begin manufacturing several of its best sellers in Mexico’s Salamanca plant, Guanajuato.

Photo by:   Unsplash, Erik Mclean
Alfonso Núñez Alfonso Núñez Journalist & Industry Analyst