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New Market Study Published: Mexico Autos Report Q1 2013

New Transportation market report from Business Monitor International: "Mexico Autos Report Q1 2013"


Boston, MA -- (SBWIRE) -- 02/16/2013 -- Over the first nine months of 2012, sales of passenger cars and light trucks in Mexico increased by 11.4% year-on-year ( y-o-y), to 703,659 units. BMI forecasts growth of 8.7% in 2012 in the passenger car segment, and 9.4% in the light commercial vehicle (LCV) segment. We maintain these forecasts, as we believe private consumption will moderate somewhat in the latter part of the year, with sales volumes dropping in line with our forecasts.

After strong growth in the beginning of 2012, we have long maintained that private consumption will moderate somewhat in the second half of the year; this view is continuing to play out. Indeed, consumer credit growth has plateaued recently, and unemployment is increasing. Combined with elevated inflation, we believe these factors will weigh on consumers' purchasing power, suggesting slightly more moderate private consumption in H212. We believe that this slowdown in private consumption will moderate growth in passenger car and LCV sales, and has informed our outlook. It should be noted that we believe this will have a relatively small impact, and we expect to see only a modest slowdown in sales in the final months of 2012.

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In the heavy truck segment, sales increased 11.8% y-o-y in the first nine months of 2012, driven by the strength of the country's manufacturing sector. BMI forecasts growth of 16% in the heavy truck segment in 2012.

In the first nine months of 2012, vehicle production in Mexico increased 13.2% y-o-y, to 2,156,988 units. In this period, vehicle production for export, which constitutes some 84% of the total, increased 15.1% yo- y, to 1,819,401 units. BMI forecasts vehicle production to increase 12% in 2012, which we maintain.

Indeed, we recently revised our 2012 real GDP growth estimate, from 3.8% to 4.0% to take into account stronger than anticipated export growth in H112. As exports are the primary driver of autos production in Mexico, our belief in a slight moderation in autos sales in the final months of 2012 and in to 2013, will not greatly affect volumes.

Indeed, there are a number of factors that have informed our bullish outlook on the auto production industry in the country, including comparative weakness in the productive capacity of Mexico's regional competitors, the continued recovery of the US vehicle market, strong domestic sales (as above), positive developments in the domestic supply chain, and Mexico's wage competitiveness.

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