Moderate Recovery in Mexican Vehicle SalesBy Alejandro Enríquez | Thu, 09/03/2020 - 14:43
Accumulated sales in the January-August 2020 period were down 31.4 percent compared to 2019. AMDA expects an annual 26 percent drop in sales, meaning only 964,400 units sold in 2020. Learn more about sales in the Mexican market below.
Accumulated sales figures in 2020 show a 31.4 percent contraction compared to 2019 and in August they experienced a year-on-year 28.7 percent decrease. "The first stage of demand recovery due to the peak of the pandemic has been surpassed. The trend now is to expect a slow gradual recovery to close 2020 with a year-on-year drop close to 26 percent," said Guillermo Rosales, Executive Director of AMDA during a live interview with El Financiero.
In total, 77,092 new vehicles were sold in August, 28.7 percent less than in 2019. Accumulated figures show 586,410 new vehicles sold, a 31.4 percent drop. "Accumulated figures show relevant trends," said Rosales. Nissan, GM and Volkswagen continue to hold almost 50 percent of the market with 20.4 percent, 16.4 percent and 13 percent, respectively.
According to Rosales, April was a historic low for vehicle sales in Mexico with a year-on-year drop of 75 percent. "From May onward, the impact has been lessening gradually as health protocols allow dealerships to open sales floors," he said. In some cities, the traffic light system prevents dealerships to open and recovery continues to be gradual.
Year-on-year accumulated growth was double-digit red numbers for all brands but one. Subaru, with a 0.15 percent market share managed to grow 2.4 percent in the January-August period compared to 2020. Smart took the biggest hit selling zero new units in 2020. Porsche also showed that the interest of Mexican consumers for its luxury models has not diminished considerably. The brand was the only one with a single digit negative grow of 5.8 percent in accumulative figures.
Year-on-year growth in August also showed slight signs of recovery, particularly in the luxury segment. Porsche and Land Rover showed positive growth of 17.9 percent and 17 percent respectively. Other brands that also show positive results in August were Subaru with 6.4 percent and Mitsubishi with 1.6 percent.
"Some elements can make this recovery more difficult, such as customer profiles and rejection of financing requests due to the great amount of informal and formal job losses, which will hurt potential customers. However, dealerships and brands have been creating more attractive offers, which include financing above five years, low interest rates and many efforts to avoid major impact to consumers," says Rosales.
AMDA forecasts a 2020 with a 26 percent setback in vehicle sales, meaning only 964,400 units sold by the end of the year. A similar figure was seen in 2009 after the financial crisis when new sales dropped 26.39 percent compared to 2008, a year when the market was still above 1 million new units sold. After 2008, the Mexican market took four years to again surpass the 1 million mark in 2013, to reach its sales peak of over 1.6 million units sold in 2016. Since that year, the market has winded down at an average annual negative growth rate of 6.39 percent. A forecast of a negative 26 percent growth is a sign that the pandemic accelerated the downward trend seen in the industry over the last years. As the market parks below the 1 million mark, recovery might take a while.