The Mexican automotive sector is expected to continue growing in the coming years, with production forecast to increase to 5.2 million vehicles in 2020.
- The Mexican automotive industry has recorded an average growth rate of 4.5% over the past three years. It accounts for 17% of manufacturing GDP and generates more than 18% of manufacturing employment (more than 800,000 jobs). Direct foreign investment amounted to EUR 5 billion in 2015.
- Mexico is currently the seventh largest producer of light vehicles globally, with 3.3 million units built in 2015 (up 5.6% year-on-year), and the fifth largest producer of car parts worldwide. Automotive exports increased 4.4% in 2015, with the US accounting for 72% of sales. Domestic car sales increased 9% in 2015 as a result of higher consumer confidence and increased brand competition.
- The Mexican automotive industry is expected to continue growing in the coming years, also benefitting from the current slump in Brazilian automotive production and the strengthening of the US dollar. It is expected that production levels will increase to 5.2 million vehicles in 2020.
- Payment behaviour in this sector has been good over the past two years, and the number of protracted payments and insolvencies is low. Business failures are expected to decrease further in the coming months as the business environment is expected to remain benign and banks are willing to lend. We assess the credit risk and business performance of the automotive sector as “Good”, and our underwriting stance continues to be open.