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Mexican Auto Industry Faces Mixed Prospects in 2017

LADB Article ID: 80217
Category/Department: Mexico
Date: 2017-02-22
By: Carlos Navarro

The export market for automobiles remains uncertain for assembly operations in Mexico because of US President Donald Trump’s threat to impose tariffs on motor vehicles produced in the country. The uncertainty was evident in the decline of 0.7% in Mexico’s total exports of motor vehicles in January relative to a year ago. Industry sources said a slowdown in exports to the US market accounted for much of the downturn. The uncertain environment was also present in Mexico’s domestic market, with the growth in sales of new cars to Mexican consumers increasing only in the single digits. According to the two leading auto industry groups, the Asociación Mexicana de Distribuidores de Automotores (AMDA) and the Asociación Mexicana de la Industria Automotriz (AMIA), domestic sales during January rose by only 3% relative to January 2016. AMDA director Guillermo Rosales said uncertainty about the economy, related in part to concerns about Mexico’s relationship with the Trump administration, contributed in part to the slowdown in sales. The biggest factor in the slower domestic growth, however, was a spike in sales during December, which in turn reduced the inventories available during January, particularly for Nissan and General Motors, Rosales said.

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