Despite imposing a 50% additional tariff in January, sales of Chinese cars in Mexico have surged. According to a report by Reuters on July 21, sales of Chinese brand vehicles in Mexico reached 137,525 units in the first half of the year, a 27.7% increase from 107,712 units during the same period last year.
Chinese brands accounted for a total market share of 17% in new car sales during the first half of the year, up 3 percentage points from 14% in the same period last year. In 2020, Chinese brands held less than 1% of the Mexican market. This significant increase indicates that Mexican consumers are increasingly accepting Chinese cars as a major option, suggesting that Chinese automakers have successfully established themselves in the local market.
Since January, Mexico has imposed a 50% additional tariff on cars produced in Asia. Hyundai Motor Group, with production bases in North America, can avoid these high tariffs. However, Chinese manufacturers, lacking automotive plants in North America, must bear the full burden of the 50% tariff.
While Chinese brands recorded sales growth in the first half of the year, analysts predict a decline in sales in the latter half. They interpret that the first-half sales figures were largely due to inventory accumulated before the tariff was imposed, noting that imports of Chinese cars into Mexico sharply decreased. In fact, by May of this year, imports of Chinese cars to Mexico had dropped by 43% compared to the previous year.
Guillermo Rosales, president of the Mexican Association of Automotive Dealers, stated, "The expansion of market share for Chinese brands will continue, but the pace of growth will slow down."
Reuters also noted that the rapid expansion of Chinese automotive brands is reshaping the Mexican car market while raising concerns in the United States. The U.S. is wary of the potential for Chinese automakers to use Mexico as a base to enter the North American market, which could threaten the $1.2 trillion U.S. automotive industry. Local officials believe that the Mexican government's decision to impose a 50% tariff on Chinese cars is intended to reassure the United States.
Meanwhile, the U.S. and Mexican governments are engaged in negotiations to amend the United States-Mexico-Canada Agreement (USMCA) to address trade issues centered around the automotive industry.
* This article has been translated by AI.
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