January 27, 2023

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Vehicles made in India dominate the Mexican market, growing by 1,300% in 15 years

Within 20 years, India has become the largest exporter of light vehicles to Mexico.

According to statistics from the National Institute of Statistics and Geography (இனேகிIn the 10 months from 2021, 56.9% of the cars sold in the country came from abroad.

If cars are included Other types of light vehicles (Pickup, minivans and SUVs) Overseas manufactured units account for 63% of the domestic sales market for the January-October period of this year. In this market, so far in 2021, India controls about 10.6%; This equates to 88 thousand 711 units sold during that period.

This marks a significant shift in the mix of light vehicle imports in Mexico. In 2005, Inaki still had the oldest figures in light vehicle sales, with the United States and Brazil having the largest share of light vehicle sales within Mexico with 20.43% and 19.45%, respectively. Respectively, only 0.71% of the units sold came from India.

This is also a significant increase in the absolute short term. In 2005, the total unit sales from India were only 8,000 units. This represents an increase of 1,002.95% compared to the less than 89,000 units already accumulated in 2021. Of the 115,701 units sold in 2020, this is an increase of 1,338.53% over 15 years.

Source: Inegi

India’s strength can be explained by the strong investment made by the Asian country in the type of vehicles that Mexicans prefer. The same Inegi figures indicate that of the 187 thousand national cars sold so far in 2021, most are similar to the smaller category. The second most popular are accessory compacts.

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Source: Inegi.

This suggests that consumers in Mexico prefer smaller vehicles. And in India, according to the India Brand Equity Trust (IBEF), Has extensive experience in the production of small and medium-sized passenger cars because they are preferred in the domestic market.

It should be added that in India, according to IBEF, the automotive industry stands out for having skilled workers at low cost and the ability to produce certain inputs (especially steel) at a very competitive cost. The local government has also made significant efforts to attract private investment, which has helped to further strengthen and reduce the production cost of light vehicles for export.

Why is Mexico importing more light vehicles?

Like India, Mexico has a strong automotive sector. But domestically produced units do not have much circulation among the national consumer. Of the 834,482 light vehicles sold in the first 10 months of 2021, only 308,739 were recognized as native to Mexico.

These figures contradict the value and quantity of production of the local automotive industry. According to Inagi data, only 257,813 light vehicles were manufactured in Mexico in October. But most of these, according to Inegi’s figures for the tenth month of this year, were 224,535, destined for export.

Fausto Cuevas, general director of the Mexican Association of the Automotive Industry (AMIA), points out that this is a historic trend because “in general proportion. [de vehículos importados con respecto al total de vehículos ligeros vendidos en el mercado nacional] It has fluctuated between 50% and 60% of total sales in recent years.

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He pointed out that the purchase of light vehicles of foreign production is “important to complete the supply of vehicles for the domestic market”. [y así] Must have a wide range of products for the national market that cannot be supplied by local production alone.

Local production of light vehicles in Mexico, From 2019, Aimed at models of medium, high and luxury ranges for sale in other countries. This approach of Mexico exporting the bulk of its production and importing cars desired by local consumers reaffirms that “by 2020, the trade balance of the automotive sector will be allowed to have a positive effect of ில்லியன் 77 billion. Dollars.”

Consumer preferences have made this strategy easier. Unlike what happens in other categories, the country of origin of the model being purchased has no effect on the purchase decision.

Research conducted by the company Deloitte In 2018, it was revealed that Mexican customers are paying more attention to integrated technologies in units. Whether or not the model was imported did not appear in the local public assessment.