BMI's Executive Summary

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BMI has lowered its full-year sales forecast for the Mexican car market in 2007. The new car market shrank in 2007, as the number of used vehicle imports, mainly from the US, continues to rise. However, while we are concerned about the impact of imports on the market, positive results in the areas of exports and production are enough to allay any fears about the long-term stability of the industry.

According to data from the Mexican automotive industry association, AMIA, new car sales reached 86,545 units in September 2007, down by 6.0% year-on-year (y-o-y). During the period January- September 2007, 778,666 units were sold, a fall of 2.6% against the same period a year earlier. General Motors de México (GM) took the top spot, despite a 7.0% downturn in sales. According to AMIA, GM sold 162,465 units during the first nine months of the year. The carmaker's sales this year have been buoyed by models such as the Chevy C2 and a stronger performance in the compact-vehicle and luxury segments. Second-ranked Nissan sold 152,956 units during the nine-month period, presenting an increasing challenge to GM's top spot. Ford, ranked third, also reported a fall in sales, of 15.0% y-o-y to 108,728 units.

BMI's new forecast for vehicle sales in 2007 stands at 1.15mn units, which is slightly below the number of sales registered in 2006. Our expectations are in line with those of AMIA, which has cut its initial forecast set at the beginning of the year by some 200,000 units. AMIA attributes the downturn in 2007 to used vehicle imports, of which an estimated 1,500,000 units are expected to be sold in the country this year alone. Moreover, AMIA says a new corporate tax will discourage companies from purchasing vehicles in the final two months of the year.

In BMI's view, the most significant industry development in H207 was Volkswagen's (VW) announcement that it is to set up a bank in Mexico. In line with its strategy for growth, VW will offer attractive financing and banking services via its dealership network in the country. The entity, Volkswagen Bank, will entail a total investment of MXN765.4mn (US$70.0mn) over a two-year period. The bank is expected to commence operations in early 2008. The venture in not only an indication of the automotive market's potential for growth, but a positive endorsement of Mexico's business environment.

Contents

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Chapter 1 – SWOT Analysis

Mexico Auto Industry SWOT

Mexico Economic SWOT

Mexico Business Environment SWOT

Chapter 2 – Latin America Regional Overview

Table: Latin America Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Latin America Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 3 – Business Environment Rankings

Table: Latin America Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production And Sales

Table: Mexico Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Trade

Table: Mexico Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Economic Contribution

Table: Mexico Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: Economic Activity Indicators

Country Snapshot: Mexico Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Table: Wages Per Year

LATIN AMERICA: Automotive Focus Report On Premium Cars

Regional Overview

Table: Competitive landscape: Regional Comparison

Table: Prospects for growth in Latin America's premium car markets

Country Landscape: Mexico

Market Size & Opportunities for Growth

Table: MEXICO – Proportion Of Premium Cars Relative To Mexico Car Market, 2002-2005

Table: Sales By Light Truck Market Niche

Customer Profil

Key Players

Table: Mexico – 2002-2005 Sales By Premium Brand

SWOT of Mexican premium car market

Chapter 6 – Special Focus: Commercial Vehicles

Table: Mexico Commercial Vehicle Market By Vehicle Type (2000-2005)

Table: Mexico Commercial Vehicle Production By Vehicle Type (2000-2005)

Light Commercial Vehicles

Table: LCV Sales By Manufacturer

Heavy Commercial Vehicles

Table: Heavy Commercial Vehicle Sales By Type

Table: Heavy Commercial Vehicle Wholesales By Manufacturer, 2000-2005, And Market Share 2005

Table: Heavy Commercial Vehicle Production By Manufacturer, 2000-2005, And Market Share 2005

Table: Sales Of Trucks and Buses By Segment, 2004 And 2005 Actual, 2006-2010 Forecast

Table: Production Of Trucks And Buses By Segment, 2004 And 2005 Actual, 2006-2010 Forecast

Chapter 7 – Competitive Landscape

Market Overview

Table: Mexico Vehicle Production 2005

Table: Mexico Vehicle Sales 2005

Manufacturers – Passenger & Commercial Vehicles

Suppliers

Industry Developments

Chapter 8 – Company Monitor

GM Regional Overview

Table: General Motors Regional Car Sales, In CBUs

General Motors Regional Production, In CBUS

General Motors Regional SWOT

Company Profiles

General Motors

Nissan

Volkswagen

DaimlerChrysler

Toyota

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Table: Wages (ave. per annum), US$

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for Latin America Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Latin American Automotive Sources

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BMI's Latin American Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include:

BMI's Affiliates and Partners in Latin America

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