Features
26 Jan 24

The 2023 Mexican car market (volumes and trends)

Mexico's automotive industry anticipates a 10.8% increase in production, reaching 4.1 million cars by the end of the year, primarily driven by higher demand from North America, according to Odracir Barquera, CEO of the Mexican Automotive Industry Association (AMIA).

The country’s car production reached 3.77 million units in 2023, up by 14.2% compared to the previous year, Barquera said in a press conference on January 9 to announce the 2023 results of the Mexican car industry. 

Barquera highlighted that the most produced cars in the past year were SUVs, totaling 1.83 million units, followed by Pick Ups with 1.04 million units, compact cars with 632,834 units, subcompact vehicles with 153,457 units, and luxury cars with 117,462 units.

Exports and imports

Car exports experienced a 15.1% increase last year, reaching 3.3 million units, with 85% of total exports shipped to North America. Of these, 2.55 million cars were exported to the US, 264,885 to Canada, and 164,032 units to Germany. Barquera noted that Mexico exported 90% of its production to these three countries.

Additionally, Mexico exported cars to Latin American countries, including 40,503 vehicles to Brazil, 25,496 units to Colombia, and 25,117 cars to Puerto Rico, among others. On the other hand, imports totaled 222,497 vehicles in 2023, he added.

Sales

Mexican car sales are projected to increase by 7% to 1.45 million units in 2024, Guillermo Rosales, president of the Mexican Association of Automotive Distributors (AMDA) said on January 9. In 2023, car sales in Mexico reached 1.36 million units, up by 24.4% from 1.09 million vehicles sold in 2022, Rosales added.

Source: AMDA

Meanwhile, Mexico’s auto parts industry, which is the world's third largest auto part manufacturer, surpassing Japan, saw sales for $121.7 billion last year, up by 17% compared to 2022, according to data from the National Auto Parts Industry (INA).

Given that a significant portion of the car production is exported, local consumers predominantly purchase imported vehicles and used cars. The Mexican car market comprises 66% imported cars and 34% vehicles produced domestically, a spokesperson at AMIA told GlobalFleet without disclosing further details.

Importing vehicles to Mexico entails various duty fees, including a preferential tariff of 10% of the general import tax for entry into the country, the Value Added Tax (VAT) of 16% of the car's value, a tax on registering new cars, and a tax on the possession or use of the vehicle.

Considering these factors, for a fleet manager, is better to buy vehicles made in Mexico instead of imported cars.

Picture Credit: Shutterstock 676056058

Authored by: Rodrigo Alonso