OEM Operations still Down in Mexico

Over the weekend, more OEMs in the country announced a cease in their operations, while others extended their suspensions. Notably, JAC, manufactured by Giant Motors, and Kia carry on with production. 

The market can expect a cut in production of around 160,000 units.

Mexico is home to Audi, BMW, FCA, Ford, GM, Honda, JAC, KIA, Mazda, Nissan, Toyota and Volkswagen, all of which have taken a hit from the COVID-19 pandemic in Europe and Asia. The Top 3 manufacturers in the country, GM, Nissan and FCA Group, produced 350,014 units in the March-April 2019 period, which is almost 6,000 units a day. Considering an average cease in operations of 18 days, COVID-19 measures could cost GM, Nissan and FCA production of around 112,000 units, assuming operations will resume on schedule. Taking into account all suspended operations, with similar calculations, the market can expect a cut in production of around 160,000 units.

Whether these measures are extended or not, some of these decisions come due to the lack of auto parts, as well. Almost two weeks ago, Minister of Economic Development of Aguascalientes, Manuel González, told Reuters that some automotive suppliers in the state, home to Nissan, have enough stock only until the end of March. As disruption in the supply chain continues, strategies among automotive suppliers are yet to be seen.