Global Carmageddon Continues: Mexico Total Vehicle Exports Crushed 12.7% In August

In short, it looks like all hell is breaking loose for the auto industry, which continues to show signs of a profound global recession. 

First, we saw Chinese auto sales fall 14 times in the last 15 months under the weight of a trade war and a far overextended consumer. U.S. auto sales have followed suit and are expected to continue to fall 2.2% percent in the back half of 2019. General Motors has found itself dealing with its first UAW strike in 12 years and now, the warning bells are also starting to be audible from Mexico. 

Mexico saw its total vehicle exports collapse 12.7% in August, a sharp drop for one of the biggest exporters of vehicles in the world, according to new data from FreightWaves. Companies like Ford, Honda, Fiat-Chrysler, Toyota, BMW, GM, Kia, Mazda, Nissan, Volkswagen, and Audi all have manufacturing plants in Mexico. 

Manufacturers shipped 281,811 units in August compared to 322,779 in August 2018, according to data from the Mexican National Institute of Statistics and Geography (INEGI) and the Mexican Association of the Automotive Industry (AMIA). AMIA President Eduardo Solís Sánchez is blaming the decline on “lower demand from the U.S., Canada and Brazil”. The three counties combined represent 90% of all Mexican auto exports.

While exports are still up 1.5% year to date, auto production has fallen almost 1% to 2.6 million units. 

Solis said during a recent press conference: “There are brands that have indicated changes in their production lines [Nissan and Mazda] and others that after a drop in demand for the models have had to make adjustments. Even [Honda] said publicly that it will close a shift because of the low demand it is having for its HR-V model.”

Mazda was one of the hardest hit names, reporting that its export volume from its Mazda3 model plant dropped 66% in August. Audi reported that exports of its Q5 crossover fell 61%. Volkswagen exports from Mexico were down 38%, Fiat exports dropped 32% and Kia exports fell 23%.  

Ford, Nissan and Honda reported increases in exports – 24.5%, 0.8% and 293%, respectively. However, Honda’s numbers were an aberration due to a flood that shut down the automaker’s plant last August.

Meanwhile, sales of cars manufactured in Mexico in the U.S. increased 10.5% to 1.6 million from 1.5 million the year prior. 

Óscar Albin Santos, executive president of the National Auto Parts Industry in Mexico, still expects 3% growth in production and exports this year. We’ll undoubtedly check back in with this optimistic estimate as we head toward the end of the year.  

He commented that the US-Mexico-Canada trade agreement is “crucial” to give the auto industry certainty to continue making investments.

The USMCA is currently stalled in the U.S. Congress.

Source Article from http://feedproxy.google.com/~r/zerohedge/feed/~3/lZzOIadSK30/global-carmageddon-continues-mexico-total-vehicle-exports-crushed-127-august

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