Mexican Automotive Market: Passenger Vehicles
Having a populaton of about 105 mio
Having a populaton of about 105 mio. residents, Mexico may be the 2nd largest market in Latin America, following Brazil, and 1 from the biggest markets worldwide. Mexico has managed a growth of its economic climate which these days is known as the Mexican miracle. Having a GDP per capita of 8343 USD and typical monthly wages of 581 USD, Mexico has a good position among emerging economies.Mexico has a longstanding tradtion of vehicle production. As early as 1930, cars (GM) had been assembled in Mexico. Mexico has no personal OEM, although some cars are nearly seen as local. These days, with about 2 mio. passenger car manufactured every year, Mexico is one from the best car manufacturing locations globally.
Mexico passenger car marketplace is characterized via a large, illegal inflow of used cars from the U.S. into Mexico. With closer ties from the Mexican using the U.S. economy, many automobiles are bought in the U.S. and brought to Mexico by people who in no way register these cars. With the opening of used vehicle imports in the U.S. and Canada which was reversed starting of 2008, the influx elevated additional. The imports mainly occur in the Northern regions of Mexico. The new car marketplace suffered in the inflow of used cars and declined over the final years. Starting from 2007, we expect a turnaround from the new car market, but not a fast increase. Even though the wealth of the population is growing, the typical Mexican nevertheless can not pay for a brand new car and also the financial achievement can hardly make up for the negative impact from the used vehicle imports.
With offical utilized car imports becoming equal in numbers to new vehicle sales, the Mexican car parc is growing fast, but more than 1 mio. from 2006 to 2007 and further on for the following years. Since a major share of the increase originates from used automobiles, there's an immediate impact on the aftermarket. Although for really inexpensive automobiles imported from the U.S. Mexican buyers will not be prepared to spend substantial amounts of money for vehicle service, but for higher-value imports they'll. The increasing wealth of Mexican consumers particularly influences the behaviour concerning vehicle support. We anticipate the aftermarket (sale of parts) to grow at nearly 6% annually at constant prices over the next many years.
The distribution system for spare parts is going to organize, with still really couple of players acting on the truly national level. Also, chain building within the components shop and the service stations segment, although it started currently, still has a tremendous potential.
Financing of cars is broadly utilized but there is nevertheless development potential. Using the average Mexican wages increasing further, financing is the only choice for many Mexican to buy a brand new vehicle.
by: Emma Watson.