Sales of light vehicles in Mexico saw their worst October since 2011 but their good results earlier in the year might prevent another slump.
The Mexican automotive sector toll took another hit last month as sales of light vehicles decreased by an annual rate of 9.1 percent. The number of sales decreased by 7,771 vehicles from last year’s October to this year’s. In October 2020, the industry sold 84,351 light vehicles but in October 2021 it barely reached 76,640 sales. In September 2021, which also reported the worst sales for the month in a decade, the industry sold 76,930 light vehicles.
While this latest loss may seem bleak, it still part of a larger recuperation trend in annual vehicle sales as 748,753 light vehicles were sold between January and October 2020 and 834,486 light vehicles were sold during the first 10 months of 2021. This represents a 14.5 percent increase in annual sales, the largest of such during this period since 2016 where there was an 18 percent increase.
Last year’s total vehicle sales amounted to 949,353, a 28 percent decrease from the previous year. The pandemic’s effect on the automotive sector was largely felt in Mexico during the first year COVID-19 halted the world as dealerships and factories across the nation closed, leading one of the country’s most valuable industries became one of its most affected.
This year’s automotive sales seemed to be going back on track and recovering from the pandemic slump as more relaxed COVID-19 restrictions increased national mobility. July exceeded sales expectations, reaching 82,157 total sales after a 12.7 percent increase from June.
The worldwide shortage of microchips needed to manufacture vehicles also affected the automotive industry as August’s sales decreased to 78,235. At the time, that still meant a 1.4 percent increase from August 2020, but sales contracted by September 2021 as the microchip crisis worsened and factories began pausing production across the country.
Annual sales now rely on the temporary recovery in the sector seen earlier in the year to break even with 2020. To do so, 114,867 more vehicles will need to be sold before January 2022, averaging 57,436 vehicles for the remaining two months of the year. Sales may continue to decrease due to multiple hardships in the automotive sales industry such as the “chocolate car” decree and continued microchip shortage. But so far, the decreases from month-to-month sales do not seem to be large enough to prevent 2021 from surpassing last year’s final vehicle sales.