The Mexican Association of the Automotive Industry (AMIA) reported a monthly recovery of 23% and an annual increase of 0.7% in automotive production at the start of the second half of 2020. However, a decrease of up to 30%, compared to 2019, in manufacturing and exports is expected for this year.
According to Fausto Cuevas, CEO of AMIA, Mexico produced 294,946 units at the start of the second half of the year, and exported 256,098, showing that it has overcome the worst of the COVID-19 crisis.
However, the automotive sector is dragging an annual deficit of over 800 thousand vehicles in automotive production, and more than 743 thousand in exports so far this year, so figures aren’t expected to normalize until 2024.
During the second quarter of the year, the COVID-19 pandemic caused an annual decrease of 18.9% in Gross Domestic Product (GDP), this had a clear impact on the Mexican automotive sector which contributes to 3.8% of the national GDP and 20.5% of the manufacturing GDP.
In addition, this industry stopped production in April and May after the Mexican Government’s statement on March 30 declaring a health emergency and the suspension of non-essential activities.
Similarly, the Mexican Association of Automobile Dealers (AMDA) reported the sale of 72,897 vehicles in July, representing a monthly increase of 16%, but an annual decrease of 31.3%, its sixth consecutive decrease.
According to Guillermo Rosales, AMDA’s Assistant General Director, 509,318 cars have been sold so far this year, 31.8% less than the 746,598 sold during the same period last year. Furthermore, Rosales predicted that 964,400 units will be sold this year, 26.8% less than in 2019.
In addition, the National Auto Parts Industry Association (INA) estimated a 23% decrease in production this year, equivalent to a decrease of $22.5 billion dollars.
According to Oscar Albin, INA’s Executive President, the situation is expected to normalize by the middle of the year as the drive from the United States and Canada, Mexico’s main trade partners comes to light.
He also mentioned that new car manufacturing volumes in Mexico, the United States and Canada focus on pickups and SUVs, which will boost the production of auto parts.
Similarly, in reference to the likely prospect of a new suspension of essential activities in the United States, which would result in the suspension of automotive manufacturing, Rosales said that the industry in Mexico, the United States and Canada, needs to strengthen health protection processes in the workplace.
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