Mexican light-vehicle sales continue to slip in May
Mexican light-vehicle sales continue to slip, drop 6.9% y/y in May
- Implications: Following a decline in Mexico's light-vehicle (LV) sales in 2017, the first five months of 2018 have also seen a decline, falling 8.9% y/y. In May, LV sales dropped 6.9% y/y. LV production in the first five months is about even with the same period of 2017 and exports are estimated to have increased.
- Outlook: IHS Markit forecasts Mexican LV sales in 2018 will decrease by about 5% to 1.43 million units. In 2018, consumers face higher inflation, higher gas prices, and tensions regarding NAFTA negotiations, all feeding into the volatility of the Mexican peso against other currencies and inflation. The situation is seeing some consumers choose to hold back from making purchases. Additionally, OEMs have reduced incentives as currency devaluation has eroded profitability, increasing vehicle prices. Lastly, financing rates have also crept up, resulting in a tougher environment to lend in. The mid-2018 presidential election may also bench consumers until some degree of clarity is in sight.
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The above article is an excerpt from AutoIntelligence Daily by IHS Markit. AutoIntelligence Daily provides same-day analysis of automotive news, events and trends. Get a free trial and read the full article.
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