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The Problem of Importing Used Vehicles into Mexico is Close to Resolution

April 10, 2014
The Problem of Importing Used Vehicles into Mexico is Close to Resolution

The importation of used vehicles from the United States and Canada to Mexico has created a problem for the Mexican domestic automotive industry, which surely contributes to the lack of growth and dynamism in the Mexican domestic vehicle market. The Mexican Automotive Industry Association (AMIA), the principal trade group of the Mexican auto industry’s largest players, is focused on addressing this issue in the legal arena through the filing of various legal appeals against the “Decree regulating the permanent importation of used vehicles,” the application of which has been extended through December 31, 2014. In case the planned appeals are rejected, such will create binding legal precedent (considered to be five consecutive court decisions on the same issue) and lead to pending lawsuits filed by importers to be resolved against Mexican used vehicle sellers. Since 2005, according to the AMIA, 7.3 million used vehicles have been imported into Mexico from the United States and Canada. Ninety percent of such imports have been made under the terms of legal injunctions issued by Mexico’s federal courts. The results of all these used vehicle imports are clear: the importation of a surplus of used vehicles, which has affected the sale of new automobiles in Mexico and, in addition, impeded the modernization of Mexico’s vehicular fleet. This phenomenon is known colloquially as the “Junkification” of Mexico’s automotive stock. According to experts, Mexican domestic vehicles sales should be in the range of 800,000 – 2 million vehicles per year. This would create 300,000 new jobs. According to data from the AMIA, 2014 domestic vehicles sales are projected to be just over one million units. Over the first three months of 2014, domestic auto sales totaled 251,124 units, while imported vehicles totaled 139,159, which represent 55.4% of the total number of new vehicles sold. As one can observe in previous editions of MexicanAutomotive™, the number of used autos imported into Mexico during the month of March, 2014 reached 46,559 units, which is equivalent to 55.4% of the total of new vehicles sold during such month. The number of vehicles imported decreased slightly over the prior year, when 13,811 fewer foreign autos were imported into Mexico.The light vehicle category is not the only area to suffer from the importation of used vehicles into Mexico. During 2013, 19,800 heavy vehicles were imported into Mexico from the United States, which represents an increase of 70% over used heavy vehicles imported during 2012, which contrasts with the 4.7% decrease of heavy truck vehicles produced and sold in Mexico during the same year.

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