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Sunday, January 13, 2013

Mexico's Auto Output Flat in December, But 2012 Marks Record High

MEXICO CITY--Mexico's auto production was nearly flat in December, and exports fell, but 2012 overall was a record- high year for both output and sales abroad, the Mexican Automobile Industry Association, or AMIA, said Thursday.


Production of cars and light trucks last month was up 0.2% to 180,597 vehicles, which marked the highest output for any month of December in the past, the association said, while exports fell 9.7% to 154,724 light vehicles.

Local sales in December fell 4.2% to 110,849 autos. Guillermo Rosales of the Mexican auto dealers association said his group is studying why sales fell last month after making modest gains for most of the year.

He added that he didn't think it marked a trend but was rather related to specific factors like the availability of credit.

The full year 2012 was a watershed for the Mexican auto industry, with nearly every month setting new production and export records, some auto manufacturers unveiling plans to set up their first plants in Mexico, and producers already in the country adding a significant amount of capacity.

Factors that have favored Mexico as an auto-export platform, industry officials say, include its trade agreements with the U.S. and Canada and with Latin American neighbors to the south, along with competitive costs.

Auto production in 2012 was 13% higher than in 2011 at a record 2.88 million, and exports rose 9.9% to 2.36 million, also a record.

Domestic auto sales last year grew 9% to 987,747 vehicles, which was about the same level as in 2002.

Mr. Rosales of the dealer's association said the group missed its goal of 1 million, but that it continues to battle with a flood of cheap, used cars from the U.S. that distorts the local market by making it difficult for owners of Mexican used cars to sell them at a reasonable price in order to buy a new vehicle.

The head of AMIA, Eduardo Solis, said that December's auto exports were affected by import quotas negotiated with Brazil earlier this year after the South American nation threatened to end its auto free-trade agreement with Mexico unless some limits were put in place.

A similar deal was negotiated with Argentina recently. For all of 2012, exports to Latin America rose 15% compared with 2011, although they fell sharply in December. Mr. Solis said Mexico's trade links to the U.S. have allowed auto sales to Americans to grow quickly as the U.S. economy has recovered in recent years.

He said that 10% of all new cars sold in the U.S. are made in Mexico. Mexico sold about 1.5 million new cars to the U.S. last year.

Mr. Solis said December's export slip was probably related to inventory adjustments in the U.S. Mr. Solis recently estimated that Mexico's auto production this year should reach a new record of about 3 million units.

nasdaq.com

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