China is the largest supplier of cars to Mexico and that will not change this decade

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China was positioned as the main supplier of cars for the local market, a situation that will continue throughout this decade, as more brands arrive in Mexico and those already established integrate more models ‘made in China’, according to specialists consulted by Expansion.

With 14,754 vehicles assembled in China sold in Mexico in January of this year, vehicles with this origin represented 15.6% of the domestic market, a share that increased from 1.8% in 2018, according to the Mexican Association of Automotive Distributors (AMDA).

The Mexican market had maintained itself for years by combining its offer between locally manufactured products, in some twenty automakers distributed throughout the national territory, and imported cars, mainly from India and Brazil, but the story is already different.

From the perspective of Brais Álvarez, account manager at J.D. Power, China will remain the main supplier of vehicles for the local market in this decade, due to the installed capacity of the Asian giant in terms of production.

At the end of 2022, China assembled 26,082,220 vehicles, equivalent to the combined production of the United States, Japan, India, and South Korea, according to data from the International Organization of Motor Vehicle Manufacturers (OICA).

“By 2030, it is difficult for us to win all that participation, because China has done a great job in terms of manufacturing, it is too competitive, but the important thing is to take steps in the right direction, and that is what is going to be done, because otherwise we would lose competitiveness”, adds Álvarez in an interview with Expansión.

Why Chinese?

General Motors (GM) was one of the first brands to offer Chinese models in Mexico. In 2005, it sold 82 units of the four-door Cavalier assembled in that country, according to historical data from the Institute of Statistics and Geography (INEGI), but in recent years other brands have followed the same steps.

French-based automaker Peugeot launched the China-assembled Landtrek pickup in November 2020, while Dodge marked its foray in October 2021 with Journey. In October of last year, Ford began bringing the Territory SUV assembled in that country.

Francisco Garza, president and general director of GM in Mexico, Central America and the Caribbean, highlights that being a global company, this contributes to the fact that its portfolios are made up of vehicles from all over the world, as well as from Brazil and Korea.

“I think we have a very good balance. Today the strategy has been to strengthen our Chevrolet brand by taking advantage of the manufacturing sources we have globally, China one of these, and we have had significant success both in the organization’s profitability and in domestic market share”.

For his part, Odracir Barqueira, incoming general director of the Mexican Association of the Automotive Industry, highlights that although China has positioned itself as “a very important producer” of gasoline-powered vehicles, he still considers it premature to know if the trend will continue when the objective is to shift to electric cars.

“It is too early to know, because this transformation of the industry is just beginning, so the players are not fully accommodated… This is an issue that already at the global strategy level of the different producing countries and the different vehicle user countries will have to see how they enter the game ”, Odracir Barqueira adds in an interview with Expansión.

Source: Expansion