
Mexico
Mexico, officially the United Mexican States, is a federal republic in the southern portion of North America. Andres Manuel Lopez Obador, also known as AMLO, has been the president since December 1, 2018.
Although growth returned quickly in 2010 after the 2008 global financial crisis, ongoing economic and social concerns include low real wages, high underemployment, inequitable income distribution, and few advancement opportunities for the largely indigenous population in the impoverished southern states.
Most of the population is found in the middle of the country between the states of Jalisco and Veracruz; approximately a quarter of the population lives in and around Mexico City
Thank you to contributors to the Mexico WikiFleet page: BDO;TIP Mexico
Chapter 1: Economic and business environment
Demographics | With an estimated population of 131 million (2022) |
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Capital | Mexico City (8.92 million residents) |
Major cities | 1. Mexico City (8.92 million residents)
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Languages | Spanish |
GDP | 2022 (Nominal) |
Unemployment rate | 3% (March 2022) Source: Trading Economics |
Main industries | Among the country's main industries are food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, and tourism. Mexico is the 7th largest automotive producer in the world and employs around 1.7 million people. |
Currency | Mexican Peso |
Interest rate | 11% (February 2023) |
Fleet Maturity Index (scaling) | Due to the impacts of the COVID-19 pandemic and correlating closedowns, overall vehicle production in Mexico droppped 27% in 2020 to 3.17 million units, being 967,479 passenger cars and 2.21mn commercial vehicles. (source: OICA) In terms of challenges, secondary LCV market values may fluctuate over the next 1-2 years (2021-2022) followed by fleet resizing and structural changes in large enterprises. Vehicle registration constraints are slowing down LCV renewal plans, thus forcing fleet operators to opt for older vehicles to keep things up and running. Inventory constraints are resulting in reduced LCV offers. (Element Fleet Management) |
Political key info | Andres Manuel Lopez Obador, also known as AMLO, has been the president since December 1, 2018. He is of the National Regeneration Movement party, a left-wing party which is also known as MORENA. |
Inflation | 7.91% (January 2023) |
Chapter 2 : Automotive market, segments & sales
Total Car park | 2022
Source: INEGI |
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New vehicle registrations (Cars, LCV, Trucks) | 2022 source: AMIA and INEGI |
Top 5 brands (total market) | 2022 sales 1. Nissan (168,940 units) -17.2% BMW (No. 15), Mercedes Benz (No. 16), and Audi (No. 18) are among the best-selling premium brands source: Autocosmos / INEGI |
Model preference top 5 (total market) | 2022 sales The best selling electric vehicle in 2021 was JAC E J7 (97 units sold), followed by JAC E 10X and MINI Cooper electric version. |
Dealer network (including fleet dealer network) | Mexico has approximately 3,000 new car dealerships throughout the country. |
Used car market/renewal cycle | Remarketing |
Chapter 3: Company car market
Total Fleet Park (company cars)/Fleet penetration in total fleet sales | Considering that corporate fleet vehicles (light passenger vehicles, LCVs, and pickups) are estimated at some 10% of total fleet, there should be around 3.5 million units in the country. Government and public service vehicles are seen at 1.2 million (source: INEGI). |
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Evolution fleet sales (last 5 years) | In 2021, light & heavy commercial vehicles sales rose 18% to 526,593 units from 445,217 (source: OICA)
Approximately 30-35% of the vehicles in Mexico are leased (1Q19, Element Fleet Management) |
Top 5 fleet brands (fleet market) | Most popular fleet car brands in Mexico
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Fleet Model preference top 5 (fleet market) | 2022 Popular automobiles |
Chapter 4: Taxation & legislation
In 2017, Mexico raised its cap on ethanol in gasoline to 10% (E10) from 5.8%. E10 is allowed in Mexican cities, with the exeption of Monterrey, Guadalahara, and Mexico City. While ethanol producers and providers of fuel additive Methyl tert-butyl ether (MTBE) supported the initiative, some environmentalists are complaining that E10 puts too much burden on the air quality.
Mexico has already mandated tax breaks on EV imports as well as purchases. Governments are also working toward tax incentives on the ownership and circulation of these vehicles and seeking to charge lower fees at tollbooths, parking facilities and related services.
National electrification policies are also in the works, one being the country’s climate legislation target which involves cutting emissions in half by 2050 from the level seen in 2000.
Mexico | ||||
The basis of company car taxation in Mexico is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects. Expected future developments are also briefly listed, if any. | ||||
1. Car taxation | ||||
1.1. Vehicle purchase tax | ||||
Taxable event
Tax rate
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Alienation of cars and definitive import
Individuals and/or companies
2% to 17% depend of the price of the car
Monthly provisional payments due on the 17th of every month
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1.2. Vehicle and Vessel Tax | ||||
Taxable event
Taxable person
Tax due
Taxable period |
Ownership of a car individual or company
Owner of a car may be individual or company
State tax that is due the first three months of each year, the rate will vary depending the car price and the state where the plates were issued
Yearly
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2. Income taxes | ||||
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3. VAT | ||||
3.1. Deduction | ||||
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3.2. Leasing | ||||
Same rate for each leasing payment (16%)
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4. Company car | ||||
4.1. Company car in personal tax returns – benefit in kind | ||||
Company cars in Mexico can only be deducted in an amount of $175,000 pesos ($9,200 USD aprox) for gasoline cars and in case of electric, natural gas or hybrid cars the amount is $250,000 pesos ($13,160 USD aprox) in a period of 4 years (25% every year) | ||||
5. Electric Vehicles | ||||
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Source: BDO (2018)
Leasing
Although 175,00 pesos is the maximum tax write off you can make when buying a company car over a four-year period, (250,000 if electric), the maximum set when leasing a vehicle for the same period would be 288,000 pesos (6,000 per month) or 410,400 pesos (8,550 per month) for electrified vehicles. This is 65% more. Keep in mind that maintenance and fuel is 100% deductible. Although maintenance is commonly included in leasing contracts, fuel is not.
Chapter 5: Car policies
There are some companies that have tracking devices to monitor the private use of cars. However, in general, it is not common to charge employees for personal use.
Keep in mind that there are many variables in full service leasing. The challenge is to tailor make your leasing agreement in accordance with your clients needs.
Among the services appreciated by some customers are replacement cars in the case of an accident or a vehicle breaking down, and special insurance coverage such as those with low deductibles or those which cover even small damages.
Source: TIP Mexico