Bullish Views Playing Out As Market Remains Strong
Light vehicle production increased 5.1% year-on-year (y-o-y) in Mexico over the first six months of 2013, to 1,488,162 units. BMI maintains our bullish view on the market, forecasting 9.7% growth in passenger car production and 5.7% growth in light commercial vehicle production in 2013 on the back of the strong sales and export outlook.
There are a number of strong fundamentals underpinning our bullish production view, including low labour costs; relative weakness in the peso, which will serve to make exports more competitive; a high number of free trade agreements (FTAs); and comparative weakness in the productive capacity of Mexico's regional competitors (s ee 'Regional Production Hub To Continue To Attract Investment', March 5 ). We believe that these factors should continue to attract autos investment in the country, particularly for export-orientated production.
Exports Drive Output Growth
|Regional Production Hub|
|Mexico Light Vehicle Export Destinations H113, %|