Mexico’s Automotive Industry Ends 2022 on a High Note
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Mexico’s Automotive Industry Ends 2022 on a High Note

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Rodrigo Andrade By Rodrigo Andrade | Journalist & Industry Analyst - Thu, 01/05/2023 - 15:17

Vehicle sales in December 2022 increased by 24 percent when compared to the same month in 2021, with more than 120,862 new units, according to the National Institute of Statistics and Geography (INEGI). In 2022, sales grew by 7 percent and surpassed the 1-million mark, exceeding the expectations of the Mexican Association of Automotive Distributors (AMDA).

This result makes December the eight month of 2022 with a positive annual rate. The month is also the one with the highest sales volume of the year. Despite the growth in sales, this figure is still 17.5 percent below pre-pandemic levels. In 2019, over 1.3 million vehicles were sold.

According to Guillermo Rosales, President, AMDA, this outcome reflects an improvement in inventory levels, which has boosted the sector over the previous lag. Rosales highlighted that this could set a trend for the rest of 2023, as reported by El Economista.

Nissan and General Motors were the top two companies on sales during 2022, with 189,940 and 165,117 vehicles sold, respectively. However, the Japanese automaker faced an annual drop of 17.2 percent, while the US company enjoyed a 29.7 percent increase in annual sales. Toyota and KIA displaced Volkswagen to become the fifth best-selling automaker in Mexico.

Mexico’s automotive industry forecasts a bright future thanks to the USMCA increase of Regional Value Content (RVC) and the boost of nearshoring activities. Experts predict that the country can become the third largest auto part manufacturer in the world, as reported by MBN. Last year, auto part production in Mexico reached a record high of US$107 billion, a 12.6 percent increase when compared to 2021, surpassing pre-pandemic levels.

Francisco González, Executive President, National Auto Parts Industry (INA), highlighted that auto part production in Japan, Germany and South Korea continues to decline, representing a unique opportunity for Mexico. The organization expects this trend to continue, growing in value to US$109 billion in 2023 and to US$110 billion in 2024. Semiconductors shortages and compliance with the collective bargaining agreements that expire in May 2023 remain as the two biggest trends for this year, according to INA.

“The path to the future of the automotive and auto parts industry enables the transformation that we are experiencing, opening up the opportunity to reach positions of greater leadership in mobility. That is an ambitious goal but it is achievable,” said González.

Photo by:   Michi S

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