Mexico auto output, exports surge in Q1

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Foreign automakers in Mexico cranked out 943,704 new cars and light trucks in the January-March period, with output rising by 36 percent alone in March to 363,687 vehicles, the Mexican Automotive Industry Association says.

DALLAS — Mexico’s booming auto industry set records across the board in the first quarter, with production jumping 17 percent, exports surging 14 percent and local light-vehicle sales rising 8.9 percent vs. the year-ago period.

Despite potential clouds on the horizon with President Donald Trump’s push for a renegotiation of the North American Free Trade Agreement and a possible U.S. border tax under consideration, many of the gains came from Mexico’s venerable assembly plants and recently launched factories.

Foreign automakers in Mexico cranked out 943,704 new cars and light trucks in the January-March period, with output rising by 36 percent alone in March to 363,687 vehicles, the Mexican Automotive Industry Association said Thursday.

First-quarter exports rose to 750,162 units vs. 657,058 in the year-earlier period, with exports for March jumping 33 percent to 297,571 vehicles, said the association known as AMIA.

Mexico’s auto exports to the U.S. rose 14 percent in the quarter to 568,075 units, AMIA said. The U.S. buys 76 percent of Mexican auto exports.

About 14 percent of all new light vehicles bought in the U.S. during the period were made in Mexico, AMIA said, citing Ward’s Automotive.

AMIA President Eduardo Solis said that much of Mexico’s production and export gains came from new plants coming online after years of construction, particularly a big Kia factory near the northern Mexican city of Monterrey that began production in mid-2016.

Likewise, Audi began a slow rollout of production at its factory in the southern state of Puebla toward the end of last year that has continued to accelerate in the first quarter.

Solis warned that the heady numbers for March came in part because automakers and shoppers were anticipating an April slowdown for Holy Week celebrations. Some plants are idled during the long vacation, when potential shoppers typically head to the beach or to visit family.

Holy Week sometimes falls in March and other times in April, creating a significant seasonal effect that won’t shake out until figures for the four-month period are available.

Nonetheless, Solis said the production ramp-up at new plants and the opening up of others now under construction in the coming years will likely keep output and export numbers rising steadily.

Likewise, he said, the process of renegotiating NAFTA is in the early stages and that recent indications from Trump administration officials suggest more mild revisions than Donald Trump had suggested as a presidential candidate.

Mexico’s domestic auto sales also remained robust in the first quarter after years of double-digit gains, reflecting plentiful financing, aggressive competition among a growing number of brands and a crackdown on substandard used cars entering from the U.S.

New-car sales in the first quarter rose to 378,248 units, vs. 347,326 in the same period last year, and March sales rose 17 percent to 137,012, according to the Mexican Automobile Distributors Association. Of those sales, 42 percent were Mexican-made cars and light trucks and 58 percent were imports.

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