Slow Recovery for the Mexican Automotive Industry?

The question of recovery has become extremely relevant for Mexico’s automotive industry.  

During Mexico Automotive Summit 2021, Alejandro Valerio, Associate Practice Leader of Mexico and Central America at Frontierview, detailed the challenges Mexico faced to achieve an economic recovery. “Mexico’s economic outcome in 2021 will depend on how the government handles the pandemic and how the US economy fares,” he told to MBN. Vaccination plays an extremely important role in the recovery process of the country, Valerio argues. However, with Mexico having vaccinated around 4.6 percent of its population so far, it is unlikely that it will achieve an economic recovery before the end of 2021. These issues will spill into the automotive industry. “Auto sales in Mexico are showing divergence according to segments and we are seeing that Mexico’s inequality gaps are growing,” he added in his presentation.

The question of sales has also been greatly discussed by many industry experts. According to Alejandro Enríquez, Industry Analyst at MBN, “when addressing the challenge of selling new vehicles in times of a pandemic, industry leaders agree recovery will take until 2024. Tailor-made strategies, resiliency and a customer focus need to be implemented to maintain market leadership,” he said. President of Mazda Mexico, Miguel Barbeyto, also agrees with that expected date for recovery. “Economic recovery will be rather slow. We are forecasting that it will take us until 2024 to reach the industry levels of 2019. There is no macroeconomic indicator that suggests otherwise. To boost recovery, the economic base should be much stronger. There should be more support for entrepreneurs and SMEs,” he said in an interview with MBN.

How Has Mazda Done Through the Pandemic?

By the end of 2020, Mazda Mexico’s plant in Salamanca, Guanajuato, became the most important manufacturer for the Japanese company outside of Japan, Barbeyto assured at MAS 2021. During October 2020, amid the pandemic, Mazda exported 206.9 percent more units than it did in that same month in 2019. “This may sound like a cliché but it is true: even if a company has a good product, at a good price with excellent aftersales service, without the team’s enthusiasm to help customers, everything else is worthless,” Barbeyto told MBN. 

Throughout the year, the company managed to have a market share of 4.86 percent, reported MBN. Barbeyto made clear that the company wanted to keep that market share for 2021, “we want to close 2021 with that same percentage. We do not want to focus on getting new customers but keeping the old ones,” he said at MAS 2021, according to El Economista.