The Mexican Association of the Automotive Industry (AMIA) reported an 8 percent monthly decrease in light vehicles sales, with 83,317 units commercialized in July 2022, according to data from the National Institute of Statistics and Geography (INEGI). The drop follows supply chain challenges that had disrupted production, putting a recovery to pre-pandemic sale levels further away.
This is the 29th consecutive month with under 100,000 units sold in Mexico. During the first half of this year, there have been 601,561 registered vehicles sold, a reduction of 0.2 percent when compared to the first six months of 2021.
Japanese car manufacturer Nissan topped the chart with 16.1 percent of total sales for this segment with 13,745 units sold. General Motors and Volkswagen followed in second and third place, with 15 percent and 11.5 percent market share and 9,383 and 7,891 units sold, respectively.
The constant disruptions in the supply chain of critical materials have challenged the global automotive industry, especially with vehicles incorporating new technology every day to compete with other brands.
“Auto parts production is becoming increasingly sensitive to the availability of raw materials. State-of-the-art technology is becoming crucial in their production as data analytics is being leveraged to avoid material waste and maximize recycling capabilities,” said Francisco González, Executive President, National Auto Parts Industry (INA), to MBN.
The auto parts market is becoming increasingly complex, requiring advanced technologies such as dashboards and security systems. “Auto tech is changing the supply chain and it is crucial to develop more talent specialized in the field and to upskill the workers who are already on the production lines,” said González.
Other external factors are affecting the automotive industry: inflation and uncertainty, which led banks to increase the cost of credits. The recurrent inflationary increases have opened the door to other financial alternatives. For example, the self-financing method is forecasted to grow by 17 percent during 2022, said Andrés de la Parra, General Director, Automotive Credit System (Sicrea).
All means of financing are expected to continue to play a role in vehicle acquisition. During May 2022, the Mexican Association of Automobile Distributors (AMDA) reported that 60.1 percent of all the marketed vehicles were sold via an automotive loan, as previously reported by MBN.
“The auto financing market behaves very differently from any other type of financing. At a time when inflation is directly affecting the pockets of Mexicans, this industry offers the possibility of programmed savings at all socioeconomic levels, without the need to pay a down payment for those who dream of acquiring a new car and we are prepared to make this a reliable and agile experience,” said de la Parra.