Mexico Auto Output Grows Despite Tariff Risks

In this week’s automotive news, the industry is confronting a dual challenge: rising production costs under USMCA rules and escalating legal disputes over US tariffs. Despite financial setbacks at Volvo and Stellantis, Mexico remains a strategic manufacturing hub, with new production milestones in Toluca and expansion plans from Kia and GAC, even as dealers warn of mounting domestic fiscal pressures.

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Mexico Auto Dealers Warn of Aggressive SAT Audits

Mexico’s auto dealership sector has raised concerns over what it describes as increasingly aggressive audit practices by the country’s Tax Administration Service (SAT), warning that the approach risks fostering extortion and corruption. The criticism was voiced by Guillermo Rosales, executive president, Mexican Association of Automotive Distributors (AMDA).

Stellantis Starts 2026 Jeep Cherokee Hybrid in Toluca

Stellantis has begun production of the all-new 2026 Jeep Cherokee Hybrid at its Toluca Assembly Complex in the State of Mexico, marking the formal launch of a new industrial program that positions the facility as the sole global production site for the model and the exclusive supplier for the Mexican market.

Mexico Auto Exports Rise 2.3% Despite Output Drop

Mexico’s light-vehicle exports rose 2.33% year over year in January to 224,528 units, despite a 2.65% decline in production to 303,980 units, according to data released by the National Institute of Statistics and Geography (INEGI). The export growth occurred amid the implementation of a 25% US tariff on most imported vehicles and auto parts, which entered into force in April and May 2025, respectively.

Cuba Suspends Aviation Fuel Supply Amid Sanctions Pressure

Cuba has suspended the supply of aviation fuel at all international airports beginning at midnight, according to official notifications sent to airlines, in a move that threatens to disrupt international air traffic and further strain the island’s tourism-dependent economy. The measure, communicated through a Notice to Airmen (NOTAM), will remain in effect from Feb. 10 through March 11 and affects carriers from the United States, Spain, Panama and Mexico, among others.

Kia Weighs New Line at Pesqueria After Record 2025

Kia is evaluating the addition of a new production line at its Pesqueria, Nuevo Leon, plant as it prepares for further growth in domestic sales, exports, and electrified vehicle offerings ahead of the 2026 FIFA World Cup, company executives said in separate interviews and public statements.

Stellantis Takes US$26.2 Billion Hit as EV Plans Scaled Back

Stellantis announced €22.2 billion (US$26.2 billion) in charges for 2H25 as it scaled back its electric vehicle (EV) ambitions and reset its business strategy. The move triggered a sharp decline in its Milan-listed shares and prompted the automaker to suspend its dividend for the year. The company now expects a preliminary net loss of between US$22.4 billion and US$24.8 billion for the period and forecasts industrial cash burn of between US$1.65 billion and US$1.89 billion in the second half.

Mitsubishi México Sales Rise 12%, Eyes Local Production

Mitsubishi reported a 12% year-over-year increase in January 2026 sales and signaled that it is evaluating future vehicle production in Mexico, as it navigates a shifting tariff environment that includes a 50% duty on vehicles imported from China, Thailand, and Indonesia.

Volvo Cars Earnings Slump 68%, Forecasts Volume Rebound

Volvo Cars reported a 68% drop in operating profit in 4Q25, citing weak demand, aggressive pricing actions, currency headwinds and the impact of US import tariffs. Earnings fell to 1.8 billion Swedish crowns (approximately US$200 million), compared with 5.6 billion crowns a year earlier. Volvo became the first European automaker to report fourth-quarter results, setting a cautious tone for the sector as investors reassess earnings expectations for 2026.

Automakers Warn USMCA Auto Rules Could Raise Vehicle Prices

Global automakers participating in the review of the United States-Mexico-Canada Agreement (USMCA) have delivered a coordinated message to US trade authorities: while they continue to support the trade pact, they warn that its automotive rules of origin are increasing production costs across North America and could ultimately translate into higher vehicle prices. These positions were detailed in letters sent to the Office of the United States Trade Representative (USTR) by Volkswagen, Nissan, General Motors, and Toyota, according to documents obtained by MILENIO.

GAC Group Weighs Knock-Down Production in Mexico

GAC Group said it does not rule out producing vehicles in Mexico as it evaluates options to manage tariff exposure and support growth in its largest Latin American market. The company raised the possibility during its 2026 annual distributor convention in Mexico City, attended by 30 leaders from automotive dealer groups and senior executives, including GAC International President Wayne Wei, Global Vice President Jack Lyu, and GAC Mexico President Rafe Huang. Executives framed the discussion in terms of long-term market positioning rather than short-term investment decisions, emphasizing that Mexico’s role within GAC’s global footprint continues to expand.

BYD Challenges US Tariffs, Seeks Duty Refunds

BYD has filed a lawsuit against the US government challenging President Donald Trump’s use of executive authority to impose sweeping tariffs and seeking a refund of all duties it has paid since April 2025, according to court documents. The case, filed Jan. 26 before the United States Court of International Trade in New York, marks the first legal challenge by a Chinese carmaker over the tariffs and seeks to void all duties imposed under the International Emergency Economic Powers Act (IEEPA) during the past year.

Heavy Vehicle Industry: The Mobile Infrastructure Powering Mexico

The heavy vehicle industry is usually analyzed solely from an automotive perspective, which typically focuses on light vehicles (those we use in our daily lives). However, this view is limited. In reality, it is a cross-cutting sector that serves as one of the main enablers of economic growth, logistical competitiveness, and productive integration. Without heavy duty vehicles, there can be no efficient supply chains, no dynamic domestic trade, and no effective integration into international markets.