"Mexico Autos Report Q4 2012" Now Available At Fast Market Research

New Transportation research report from Business Monitor International is now available from Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 23 October 2012

Continued recovery of the US market, a revision in our forecasted strength of the peso and positive developments in the domestic supply chain have caused us to become more bullish on the long-term strength of the Mexican auto production segment. With the cumulative H112 export and production up 15.1% year-on-year (y-o-y) and 12.8% y-o-y respectively, we have revised up our 2012 growth forecast from around 10% to 12% y-o-y.

Meanwhile, on the back of Mexico's prospects to diversify its autos production to the Latin American markets, we forecast that the country's production will grow an average of almost 11% y-o-y during the rest of the forecast period to 2016.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/456356_mexico_autos_report_q4_2012.aspx) (http://www.fastmr.com/prod/456356_mexico_autos_report_q4_2012.aspx)

Growth in investment will be the key driver of this trend. In May 2012, South Korean automaker Hyundai Motor revealed plans to establish a new production facility in Baja California in Mexico, with investment of US$131mn. Swedish commercial vehicle manufacturer Scania is reportedly in discussions with Brazilian bus chassis supplier San Marino Onibus e Implementos (Neobus) to restart its San Luis Potosi facility in Mexico. Among suppliers, Japan's Koito Manufacturing, UK's GKN and Italy's Pirelli have expanded their presence in the country. GKN's automotive business unit GKN Driveline opened a third precision forge facility in Celaya, while Pirelli started manufacturing operations at its Silao facility.

There is also considerable optimism in terms of demand. Light vehicle sales in Mexico rose almost 12% y-o-y to 462,439 units in H112, after an equally impressive growth of almost 10% y-o-y in 2011. However, in line with our broader view of a cautious consumer demand during H212, we forecast of new vehicle sales to grow 8.8% y-o-y, to just over 1mn units during 2012. Beyond 2013, we maintain that vehicle sales will grow at just above 8% y-o-y, on average between 2013 and 2016.

Meanwhile, the trend of low-cost car rental is also quickly picking up in Mexico. In July 2012, Mexico City launched a low-carbon, low-cost car rental service, the Carrot Shared Automobile System, aimed at encouraging mobility alternatives and reducing pollution levels. The development falls in line with BMI's long-held belief that low-carbon (electric, hybrid, and fuel-efficient) car rentals will be an expanding market globally as customers move away from car ownership, auto manufacturers develop more sophisticated business models, and low-carbon vehicle technology develops.

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