New Norms, New Plans to Move Forward

Q: How have regulations evolved in the heavy-vehicle segment to boost technology development?
A: In 2018, two new regulations were approved: NOM-012 focused on safety, implemented by the Ministry of Communications and Transport (SCT), and NOM-044 regarding the incorporation of post treatment and new engine technology, issued by the Ministry of the Environment (SEMARNAT). Both regulations will bring many benefits in terms of road safety and environmental protection but they demand additional initial investment from clients due to the added costs related to emission control technology. SEMARNAT expects environmental benefits stemming from NOM-044 to represent approximately US$120 billion related to public health and environment issues. However, without the proper incentives, we will not reach these savings soon.
Q: What factors could slow the benefits from these regulations?
A: Used-vehicle imports could potentially hinder the development of the domestic market. Although regulations were updated through the implementation of a new NOM-012 and NOM-044, these only apply to new vehicles. Unlike the light-vehicle market, heavy-vehicle imports have increased since 2015. Today, for every 100 vehicles registered in the Mexican market, we import 28 used-vehicles from the US with an average age above 16 years. If we compare it with 2017 figures, there has been an increase of 28 percent in used-vehicle imports from the US. The real problem is that in Mexico there are very few regulations that prevent scrap vehicles from being imported and those that are in effect are not enforced at the border.  
The US has effective regulation enforcement, which means that these units can no longer circulate there. On the contrary, Mexico has not managed to implement the right supervision to follow up on physical-mechanical regulations established in NOM-068-SCT or pollution emissions regulated by NOM-045-SEMARNAT. There is a complete asymmetry between Mexico and the US, which results in our roads being filled with scrap that puts our health and road safety on the line. Ideally, all vehicles entering the country should be checked beforehand. We understand this is a difficult situation in the light-vehicle segment due to the number of cars that enter per month but that is not the case in the heavy-vehicle market. Approximately 10,000 heavy vehicles are imported each year, which means that only 27 units would have to be checked daily across all border crossings.
Q: What is the role of PEMEX and ultra-low sulfur diesel (ULSD) availability in this transition?
A: One of the requirements to advance to newer technologies in emission control is to ensure ULSD availability. This fuel will be mandatory starting Jan. 1, 2019 and July 30, 2019 will be the last day that Euro IV / EPA 04 units will be manufactured or imported. Yet, ULSD is still not 100-percent available throughout the entire country. We are in the midst of an energy reform and all companies importing fuel must do so with ULSD. PEMEX is the only company that sells regular diesel and the challenge is for this entity to change its offering between now and 2019 to comply with the NOM-016-CRE regulation established by the Energy Regulatory Commission.  
Q: What will be the future of the scrappage scheme and what are your plans to move forward with fleet renovation?
A: The scrappage scheme ended on Dec. 31, 2017. What we are now pushing for is to have differentiated green incentives depending on the type of company applying for financial support. There should be a scheme designed for companies wanting to acquire the new technology established by NOM-044-SEMARNAT, and another that supports the growth of owner-operators through financing and training for professionalization. We are already in talks with SCT, the Ministry of Economy and SEMARNAT but the Ministry of Finance must make the final ruling. Our hope is that any new scheme is implemented this year, considering that the new regulations will be enforced in 2019.

The National Association of Bus, Truck and Tractor Manufacturers (ANPACT) has represented heavy-vehicle and engine manufacturers since 1992, promoting the development of the commercial-vehicle industry in Mexico.