Mexico Autos Report Q2 2012
Business Monitor International, February 2012, Pages: 52
Business Monitor International's Mexico Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Mexico's automotive industry.
BMI's long-held view about Mexico being a major outperformer in autos production in the Latin America region is gathering strength following Nissan Motor's and Chrysler's announcements of increased production-related investments in the country. These came alongside new investment commitments from parts suppliers Denso Corporation and German tyremaker Continental's subsidiary Continental Tire the Americas (CTA), both of which cited increased demand for their parts domestically and the opportunity to export to North American markets as the key drivers for their multi-million-dollar investments in Mexico.
In line with these investments, we expect average growth in autos production of 8.6% year-on-year (yo- y) between 2012 and 2016 – growing faster than the regional average of 7.6% y-o-y. What sets Mexico apart from its regional rivals Brazil and Argentina is its cost-competitiveness and the free trade agreements with its close neighbours. Another factor that works in Mexico's favour is its increasing exposure to diversified markets, which will guard the production segment against a slowdown in the North American market.
Meanwhile, considerable optimism has returned to the vehicle sales segment, thanks to a 9.8% y-o-y rise to 0.93mn units during 2011, marking an impressive recovery following a modest 8.6% y-o-y rise in 2010. Our macroeconomic team believes that private consumption is set to post a fairly strong growth of 4.5% in 2012, up from 4.1% recorded in the first three quarters of 2011. More support to this will come from increased credit levels, prompting BMI to forecast sales growth of 8.8% y-o-y during 2012. Beyond 2013, the outlook will depend upon the pace of economic recovery in the US. For now, we maintain that average annual vehicle sales will grow at just above 8% y-o-y between 2013 and 2016.
Despite these positive developments, Mexico continues to underperform in BMI’s Risk-Reward Ratings this quarter, with a score of 55.6 points – against the regional average of 57.6 points. This is due to growing caution among industry participants regarding its operating environment. In 2011, Navistar International's CEO, Dan Ustian, warned that the US truckmaker may shift production away from Mexico owing to escalating political instability in the country, particularly related to drug violence.
Moreover, we are only cautiously optimistic about the new maximum limits on vehicle emissions introduced by the Mexican Ministry of Environment and Natural Resources (SEMARNAT) from January 5 2012. Although BMI has long been expecting such a move and we have few doubts about the limits helping curb vehicle emissions, we believe that the policy could be undermined by Mexico's increased relaxation of regulations on the import of cars, particularly from the US.
Executive Summary
SWOT Analysis
Mexico Autos Industry SWOT
Mexico Political SWOT
Mexico Economic SWOT
Mexico Business Environment SWOT
Regional Overview
Company News Alert – Lifan Uses Popular Route Into Brazil
Business Environment Ratings
Table: BMI Risk-Reward Ratings For The Autos Industry In The Americas
Table: Mexico – Economic Activity
Industry Forecast Scenario
Domestic Sales
Table: Mexico Autos Sales By Segment – Historical Data And Forecasts
Production
Table: Mexico Autos Production By Segment – Historical Data And Forecasts
Trade
Table: Mexico Autos Trade – Historical Data And Forecasts
Economic Contribution
Table Mexico Autos Sector – Historical Data And Forecasts
Competitive Landscape
Table: Mexico Vehicle Production, 2010-2011
Table: Mexico – Vehicle Sales To Dealerships, 2010-2011
Industry News
Passenger Cars
Table: Mexico Passenger Car Segment – Historical Data And Forecasts
New Investments
Jumping On The Electric Car Bandwagon
Commercial Vehicles
Table: Mexico Commercial Vehicle Segment – Historical Data And Forecasts
Light Commercial Vehicles
Heavy Commercial Vehicles
Table: Mexico Top 10 Truck Manufacturers By Production 2009-2010
Table: Mexico Top 10 Truck Manufacturers By Sales, 2009-2010
Motorcycles
Table: Mexico Motorcycle Sector – Historical Data And Forecasts
Company News
Suppliers
Segment Trends
New Investments
Domestic Going International
Company Monitor
Industry Trend Analysis – Assured Gains For MAN, But Challenges Remain
Company Profiles
General Motors Company (GM)
Volkswagen (VW)
Chrysler
Toyota Motor
BMI Methodology
How We Generate Our Industry Forecasts
Sources
- General Motors Company (GM)
- Volkswagen (VW)
- Chrysler
- Toyota Motor
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