Sheinbaum Pledges 'Chocolate' Car Decree Continuation

Claudia Sheinbaum, the presidential candidate for Morena, reiterated her commitment to continuing the decree for the regularization of "chocolate" cars during her potential presidency in Mexico. She made this statement during a media briefing in Baja California's capital.

Earlier this week, some members of the industry expressed their discomfort with the decree by itself.

Highlighting the significance of this policy, Guillermo Rosales, President, Mexican Association of Automotive Distributors (AMDA), highlighted the impact of unregulated "chocolate" cars on the formal automotive market.

"At the end of this administration, more than 2.5 million scrap cars, mainly from the United States, will have been regularized, causing a 30% drop in sales of used cars in the formal market”, Rosales said.

Rosales expressed hope that the incoming administration would not only maintain but also eliminate this practice, citing its exploitation by organized crime. He urged decisive action to halt the influx of illicit vehicles, emphasizing the necessity for the next government to terminate the decree entirely.

Despite the ongoing regularization process, Rosales noted that the influx of unregulated vehicles persisted, leading to a sustained decline in sales for formal dealers, especially along the northern border.

He cautioned that even after the decree's conclusion, the lingering presence of newly regularized vehicles would continue to impact the market adversely. "We believe that as long as trade in already-regularized vehicles persists, the negative impact will endure, exacerbating the issue of automotive contraband”, Rosales added.

Regarding projections for new car sales, Rosales anticipated a steady upward trend, estimating a potential 7% increase to reach approximately 1,451,000 units by the end of 2024. However, he acknowledged that surpassing this figure to reach 1,500,000 units would hinge on consumer sentiment, purchasing power recovery, and market competition among manufacturers.