AMDA projected that 1.09 million light vehicles will be sold in Mexico in 2023. This figure is 17 percent below pre-pandemic levels, as 1.32 million units were sold in 2019.
The effects of the COVID-19 pandemic and following supply chain disruptions will continue to impact new vehicle sales, in addition to partial lockdowns at Chinese component manufacturing plants, the increase in interest rates and vehicle prices, explained Guillermo Rosales, President, AMDA.
“Preliminarily, a market of 1.09 million sales is contemplated for 2023. Although other analysts and financial institutions estimate that 1.15 million units will be sold,” said Rosales. December 2022 is expected to close with 107,203 vehicles sold, “if the vehicles land on time and are delivered during the rest of the month. This will allow us to exceed 1.72 million units and, if logistics improve, close the year at 1.8 million units sold,” he added. This figure would represent a 5.7 percent increase in new vehicle sales compared with 2021, when they amounted to 1.01 million units.
Rosales pointed to inflation as a key factor that will impact sales in 2023, due to its link to interest rates and the limitation that it represents for credit placement. Financing is the main way of acquiring a new vehicle in Mexico. In 2022, almost 60 percent of the total purchases of new vehicles were made using credit, according to a report by AMDA, JATO and Urban Science.
The domestic market is also threatened by “chocolate” cars, which impact new vehicle sales massively, according to AMDA. Automotive experts forecast that the sale of used imported vehicles will surpass the sale of new units in 2022, as an estimated 1.2 million foreign automobiles entered Mexico during this year, as reported by MBN. About 1 million of these vehicles are non-certified and only 200,000 of them comply with customs regulations.
“The accumulation of vehicles in circulation will impact the secondary market and it is already having repercussions in new vehicle sales, as well as a drop in prices. Dealers and independent sellers operating close to the border [with the US] report to me. The outlook for 2023 will have pressures around the cost of cars. The most worrying thing is that the government already announced that the introduction of cars from the US will continue,” said Rosales.