Covering the Industry's Economic, Legal & Financial Issues

MexicanAutomotive covers the Mexican automotive and auto parts industries, and is published monthly in English and Spanish. MexicanAutomotive reports on general Mexican automotive industry topics, as well as economic, financial and legal issues affecting the North American automotive industry. Published by Cacheaux, Cavazos & Newton (CCN), subscriptions to MexicanAutomotive are free. CCN is an international law firm with offices in Texas and Mexico. The firm provides legal services in many practice areas including Automotive law to clients doing business in the NAFTA region. | English
Collaboration between the Mexican Government and the Business Organization AMIA E-mail

Collaboration between the Mexican Government and the Business Organization AMIA

The Mexican Automotive Industry Association Asociación Mexicana de la Industria Automotriz (AMIA) recently signed an important agreement with the Mexican government concerning issues related to energy and the environment. Such agreement refers to the charging of electric vehicles, as well as the benefits of using hybrid and electric vehicles pursuant to the Mexican government’s policy to mitigate the effects of greenhouse gas emissions. Mexico is the first Latin American country to regulate the emission of carbon dioxide in new light vehicles. The president of AMIA, Eduardo Solís, emphasized at the signing of the agreement that the hoped for results of the Mexican energy reform will allow new natural gas systems to be used in the process of vehicle painting, which means new technological opportunities. In addition, the Mexican automotive industry will soon have access to ultra-low sulfur fuel, as established five years ago by the Official Mexican Norm 086, which established a commitment from PEMEX, which has thus far remained unfulfilled. Mexico’s Secretary of Energy, Pedro Joaquin Coldwell, acknowledged the importance of the automotive industry to the country and reiterated the federal government’s commitment to support the industry and its continued importance to Mexico’s economy. Coldwell pointed out that the energy reform would favor the automotive industry immediately following the opening of the fuel sales market to the public. As is widely known, by 2017, the exclusive right of PEMEX to provide fuel to companies will be eliminated, which will allow for access to other brands. Once the PEMEX monopoly and right of exclusivity comes to an end, importing fuel will be possible and the doors will open to companies that comply with the applicable regulations for importing fuel. By 2018, the full application of the reform is scheduled, and with it will come the freedom to establish brands, prices and a free market in the fuel supply industry. In regard to the electricity sector, the Energy Secretary pointed out that an open free market would contribute to the range of Mexican energy options by integrating clean energy into the country’s energy portfolio. On the other hand, the promotion and development new technologies such as hybrid and electric vehicles will increase. Without doubt, these are steps that benefit the Mexican automotive industry.

Hyundai achieving success in Mexico E-mail

Hyundai achieving success in Mexico

One year after beginning operations in Mexico, the South Korean company has managed to exceed the expectations that accompanied the company’s arrival in Mexico. Currently ranked as the fifth largest auto manufacturer in the world, the presence of Hyundai vehicles is more and more noticeable on Mexican streets and highways. The expectation in May 2014 was to sell 8,000 units, and such figure has been substantially exceeded. After just one year of operation, Hyundai has already sold more than 12,000 units in Mexico. While the company’s overall penetration of the Mexican market is currently somewhat modest, if this trend continues, the South Korean automaker will become a serious competitor to other brands in the Mexican market. So far, the company’s most successful models are the Grandi10, hatchback version, comprising 23% of sales, and the variant Grandi10 Sedan, with 25%. The compact Sedan Elantra makes up 24% of Hyundai’s Mexican sales, and the SUV IX35 is at 20%. Sales of the Sonata model accounted for 8% of Mexican sales. Hyundai has 31 dealerships operating throughout Mexico, and the company plans to finish the year with 40 dealerships, according to Pedro Albarrán, General Director of Hyundai Motor de Mexico.

Automotive Statistics E-mail

Automotive Statistics

May 2015: Positive numbers continue:

· Sales of light vehicles in May were 15.6% higher than sales registered in May 2014.

· Mexican production of light vehicles continues to rise. May 2015 saw a record 288,382 units produced, which is 0.3% more than light vehicle production in May 2014.

· 1,420,863 units have been produced thus far in 2015, representing an increase of 8.4% over cumulative production during the same period in 2014.

· In May 2015, Mexico exported 240,709 light vehicles, which is 2.6% more than in May 2014, when 6,080 fewer vehicles were exported.

· Total exports thus far in 2015 show record numbers, with 1,162,738 vehicles being exported, which represents an increase of 11.5% over the same period in 2014.

· By comparison, 7,014,264 light vehicles were sold in the United States from January through May, 2015, which is 4.5% more than the same period in 2014.

· Viewed by region, Mexican exports to Europe, Canada and the United States increased.

· Exports of Mexican vehicles to Latin America, Asia and Africa actually fell. The main target of Mexican exports is the NAFTA region, which receives 82% of Mexico’s auto exports.

· Light vehicles produced and exported by Mexico from January through May were destined for the following countries:

United States 70.4%

Canada 11.3%

Germany 3.8%

Brazil 2.9%

Colombia 2.4%

China 1.5%

Argentina 1.2%

Ford Announces $2.5 Billion Dollar Investment in Mexico E-mail

Ford announced two investment plans to supplement the 90th anniversary of the company’s operations in Mexico. The investment will consist of $1.3 billion dollars allocated to the production of engines in its Chihuahua plant, which will produce two new types of diesel power systems. Additionally, 1.2 billion dollars will be allocated for the manufacture of transmissions. This investment will be made together with the German firm Gertag.



Mexico City Innovates With Electric Scooters for Rent E-mail

Mexico City traffic is among the most complicated of any city in the world. As one of the world’s most populated cities, with an inadequate public transport system (despite multiple efforts to modernize and streamline such), many residents are seeking new ways to ease their movement around the city. Mexico City authorities have implemented a system of bike rentals in areas of particular congestion, while some roads now have bike lanes. The city has also established programs to place limits on the movement of vehicles, and many other measures, some of which have been successful and well received by transport users.  Individuals themselves have experimented with private taxis, like Uber, which have become popular and operate in certain areas of the city, mainly the west and south. The latest is an innovative program for moped or electric scooter rental that has proved a good choice for a group of users in some areas of the city. The project is known as Econduce® and consists of electric bikes that have ability to travel up to 45 kilometers per hour and are set to be rented to those who meet certain requirements, such as having a driver's license and credit card.  Renters go to service centers to pick up the vehicle, and then return it to the same or another service station at the end of the rental period. Rental rates vary by hour, day or week. There are already a dozen service stations in the city. The project began with 50 scooters and in short expanded to offer 100 units. It is a transportation system that does not pollute, create much noise, is agile, safe and simple to use. The vehicles are light, which makes them easy to drive at 80 kilograms. Their speed is limited to 55 kilometers per hour, and helmets are required and available at designated service stations.

Audi Reopens in the Mexican Market E-mail

In Mexico, carmaker Audi operates in the segment known as “Premium,” which refers to luxury cars. According to Walter Hanek, General Director of Audi-Mexico, this segment grew by 5.95%, and Audi increased 4.3%, which presages another good year. The same automotive official also announced new releases for 2015. After offering the A6 and A7, the company will follow with the A1 and A1 hatchback for younger drivers, and those who think they are young. Next they will present the SUV Q3, followed in the next half of the year by the sporty TT. The novelty of these Audi models is that they have accessories that the car owner can individualize, which may not necessarily increase sales, but will – as affirmed by the General Director - increase user satisfaction. For example, Audi offers a package called Audi Plus and offers complementary maintenance for the first three years, which will allow the car owner to only worry about filling the tank. Audi is conscious that it needs to extend its zone of influence in Mexico, so it has announced the appointment of dealers in the state of Sonora, and the company desires to have more dealers in Monterrey and the Los Cabos area.


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