New Car Sales Grow 20% in January 2023: The Week in Automotive

Mexico’s automotive sector saw a boost from the USMCA Rules of Origin outcome, which helped land investments totaling US$15 billion. The industry is also benefiting from the increasing availability of raw materials, which allowed new vehicle sales to grow 20% in January 2023, when compared to the same month in 2022. 

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US Asks Mexico to Review Labor Rights Issues Again

The Democratic Union of the League of Workers presented a new labor complaint under USMCA’s Rapid Response Mechanism (RRM) against VU Manufacturing. The complaint has led US representatives to ask Mexican authorities to investigate alleged labor rights violations in VU Manufacturing's plant in Piedras Negras, Coahuila.

This is the second time the union, also known as La Liga, filed a complaint against the company. In mid-2022, workers at VU Manufacturing’s plant claimed that the company had blocked their attempts to form unions and negotiate their contracts.

BBVA México, SEV Boost EV Financing
BBVA México and Solarever’s Mexican subsidiary SEV announced a partnership to promote sustainable mobility in Mexico. The initiative will offer differentiated financing options for the most popular hybrid and EVs. “Of the total number of cars financed in the market, by financing companies and banks, only 1% corresponds to the purchase of hybrid or electric cars due to the belief that these are much more expensive than a combustion car. We are sure that now with SEV this stigma will disappear,” says Victor Rojas, Director Automotive Banking, BBVA México.

SRE Presents Sustainable Transition Roadmap to Automotive Sector

Mexico’s Ministry of Foreign Affairs (SRE) and the University of California unveiled the “Diagnosis and Recommendations for the Transition of the Automotive Industry” through its Alianza Mx program. The initiative outlines the initial steps for transitioning towards manufacturing less-polluting vehicles. According to SRE, the recommendations are based on research and dialogue with over 160 stakeholders from the industry, academia and government in the US and Mexico.

New Car Sales Grow 20% in Mexico; EV Sales Hit Record in the EU
New vehicle sales in Mexico rose 20% year-on-year in January 2023. A total of 94,414 light vehicles were sold during, a 15.6% increase compared to the same period in 2021 but still 10% below the figure for January 2020, reported the National Institute of Statistics and Geography (INEGI). The increase in sales was largely attributed to the increased availability of materials. 

"January's result reflects an improvement in inventory levels, which, although still asymmetric among brands, has resulted in an improvement over the previous lag," says Guillermo Rosales, President, Mexican Association of Automobile Dealers (AMDA).

GM, Lithium Americas to Boost Lithium Production in North America
Both companies have announced a US$650 million investment to expand lithium production in the US. This investment is set to help finance the development of Nevada’s Thacker Pass, which is anticipated to become one of the world’s largest lithium mines, and create 1,000 construction jobs and 500 operational positions.

The mine is expected to help reduce the US dependence on lithium imports. “GM has secured all the battery material we need to build over 1 million electric vehicles a year in North America by 2025 and our future production will increasingly rely on domestic resources such as the site in Nevada we are developing with Lithium Americas,” says Mary Barra, CEO and Chairman, GM.

USMCA Rules of Origin Outcome Brings US$15 Billion to Mexico: INA
The ruling in favor of Mexico and Canada’s Rules of Origin posture will boost the attraction of investments to Mexico, as it provides certainty for suppliers and car makers. This result helped to secure investments totaling US$15 billion. During an INA's press conference, Marco Antonio del Prete Tercero, Minister of Sustainable Development of Queretaro, also introduced the International Automotive Industry Supply Summit, which aims to become the second-largest auto parts event in the Americas and the largest in Latin America.

Renault to Assemble Vehicles in Mexico after Two-Decade Hiatus
The Renault-Nissan-Mitsubishi Alliance unveiled a new initiative to enhance the value of the three automakers in Latin America, India and the EU. The plan will focus on electrification and decarbonization and allow for joint technology development.

The program aims to create high-value projects in the target regions and improve collaboration. It will also involve restructuring the shareholding participation of the three automakers. Additionally, Renault is planning to restart car production in Mexico after a two-decade pause, utilizing Nissan's plant in Aguascalientes.