Pedal to the metal - Auto Report - motor vehicle makers see sales gains in Mexico - Brief Article - Industry Overview

Latin Trade, Oct, 2002 by Mike Zellner

Automakers are ripping up the road in Mexico. General Motors clocked 30% volume growth through the first half of the year, and Nissan and Volkswagen are on its tail, booking about a 15% growth. Overall, the market raced through a 15% expansion to almost half a million vehicles sold in the first six months of 2002, says research firm DRI*WEFA.

Nissan's Tsuru may be the best-selling car in the market, but the Japanese automaker is not resting on its laurels. Nissan began producing the subcompact Platina, its first combined effort with Renault, at its plant in Aguascalientes this year. The new sporty four-door Sentra sedan, meanwhile, will hit dealerships in November to help shift Nissan into overdrive in Mexico.

General Motors has its foot on the gas, too. To keep Corsas and other models moving off showroom floors, "The General" continues buyer incentives like cash discounts, 30 months of zero-interest financing and two years of insurance coverage.

Reinhard Jung, recently named as CEO of Volkswagen de Mexico, is revving up Pointer output in Puebla, After successfully opening the market with Brazilian imports of the model, the German automaker is launching a Mexican 2003 version.

What the leaders of the pack see in the rearview mirror is a host of new entry-level cars like the Seat Ibiza, Peugeot 206, Renault Clio and Ford Ikon. The 34% boom in entry-level vehicle sales during the first half of 2002 has left other car segments in the dust. Toyotas arrival this year with its Camry and Corolla promises to make the race even more interesting in 2003.

Light truck sales, although still less than a third of passenger car sales levels, have also been on the move, In the first half of the year, light truck sales grew 25% to just over 131,000 vehicles. DaimlerChrysler is peeling out in light truck and other light commercial vehicle sales with 44% growth in the first half of 2002, compared to the same period last year. But GM, the overall segment leader, and Nissan are in hot pursuit with growth of 24% and 36%, respectively.

Mexican authorities plan to remove or lower auto taxes to bring them in line with the United States and Canada by 2004, a move that could drop prices by as much as 30% and give another jolt to sales. DRI*WEFA expects the Mexican market to grow by half to 1.4 million vehicles sold in 2007 from nearly 940,000 in 2001. But that doesn't mean bigger market share for established players. The research company expects new entrants in the Mexican market will bring Nissan and GM, with their estimated 2002 shares of 24% and almost 23%, respectively, to just 20%. VW meanwhile, will hold a 19% slice of the Mexican market.

No wonder Nissan, GM and VW are keeping the pedal to the metal in Mexico.

[GRAPH OMITTED]

Top Sellers


Tsuru/Sentra (Nissan)  21%
Joy/Swing (Chevrolet)  12%
Pointer (VW)            8%
Jetta (VW)              6%
Atos(Dodge)             5%

Note: Table made from pie chart