US high demand for trucks pulls down the auto exports in Mexico image

With US as main exporter for Mexico’s car production, the local output kept dropping this year, as it mainly relies on light vehicles.

The United States is Mexico’s top trading auto partner, receiving two-thirds of all the cars built in Mexico. But the local production is mainly based on cars and the US buyers are lately focusing on much bigger vehicles, a trend still pushed forward by low gas prices. In US, the demand for SUVs, pickups or crossovers, has rose 11 percent in the first four months of the year, while sales of cars slipped 5.5 percent. Consequently, the auto production in Mexico is on a downward trend so far this year, falling by 4.9 percent in April versus the same month last year to 269,604 from 283,392 units, while auto exports plunged 15.6 percent to 197,020 units from 233,515 in 2015, according to data from the Mexican Automotive Industry Association.

“We are sending the type of vehicle that is losing ground in the US,” AMIA President Eduardo Solis said, quoted by Automotive News. This year through April, auto exports dropped 7.4 percent to 854,118 vehicles, compared with 922,029 in the same period last year.

However, the local output is soon to be revived, as Ford, General Motors and Fiat Chrysler are among the US companies planning to move some of their car production from North America to Mexico. Furthermore, Kia will soon open a new car plant in Mexico and Audi also aims to open a light-truck factory to build SUVs starting in the second half of the year. With this kind of help, Mexico’s light-vehicle production could hit record levels again by the end of 2016, Solis said.

Via Automotive News