The Business Year

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Compared to other emerging markets, Mexico has a diverse automotive industry, with a range of both challenges and solutions.

Miguel Barbeyto

President, Mazda de México

Currency volatility is the biggest challenge for the industry in Mexico right now. In 3Q2017, the industry went down. Nobody knows what volatility or uncertainties will occur with the new government. Past elections have never created the level of volatility we experienced in the currency in 2016; so, right now it is really difficult to say. We do know that as a country we need to continue to create employment so that the economy generates more income and our GDP grows. I have heard that Mexican GDP growth is going to be 2.1% in 2017, and the automotive industry is the most important industry in the country representing around 3.1% of GDP. Central and South America are really important for Mazda. We have a robust presence in Mexico and the Pacific Alliance countries. Our intention is to continue growing in those Central and South American markets.

Horacio Chávez

Managing Director, KIA Motors México

KIA is at the technological vanguard. We are one of the first brands in Mexico to have a hybrid SUV for the domestic market and such vehicles are already trending in the market. KIA also has plug-in hybrids, electric cars, fuel cells automobiles, and developments in autonomy. For Mexico, we are just waiting for the right moment to start bringing them because well-designed infrastructure is needed for electric technology. There is an analysis of what has been done in other regions with this partnership between the private initiative and the authorities to develop this faster. Mexico can still generate incentives and such partnerships. Our Niro is the second-best seller, and the only hybrid small-SUV within the Mexican market. There is an important increase in the sale of hybrid vehicles, up to 30% compared to 2016. Mexico has to move faster in that sense, though it is one of the areas of opportunity that the country has.

Eduardo Saenz

President, Eduardo Saenz

The perception of Chinese cars in Mexico when we entered with the BAIC brand was poor. This was because of the market’s negative experience in the past with the cheapest FAW brand cars imported from China and sold through Elektra stores with a poor business model that did not include solid aftersales support. That was a bad experiment for Chinese brands entering the Mexican market. What we learned is that we need to offer different dealer networks backed by servicing and so forth. We had to work hard to reverse that perception. There is definitely a range of quality with Chinese products; however, in the car industry the quality is excellent. We are changing that bad perception and have turned a corner. Both sales and dealerships are growing rapidly in Mexico. We want to grow our vehicle sales three-fold YoY from 1,000 units in 2017 to 4,000 units in 2018.

Raúl Peñafiel

CEO, Jaguar Land Rover México

The premium market in Mexico, despite the fall of the global market, continues to grow, albeit more slowly. However, in 2017 Mexico became the first premium market in Latin America, ahead of Brazil. The Mexican market will grow in parallel or surpass the Brazilian market in the coming years. The luxury market weighs much more in Mexico than it does in other markets such as Brazil. The growth of Jaguar Land Rover as a brand was the fastest growing in recent years within the premium segment worldwide and that was achieved by being faithful to our brand positioning. We want to remain a moderately accessible luxury item; we will not be high premium. Our ambition for 2018 is to double our sales. It seems like an ambitious goal; however, it is fully achievable. In 2018, we will bring in six new products and we have a network that has an in-depth growth plan.

Hiroshi Shimizu

President, Honda de México

Acommon strategy across emerging markets is establishing a strong brand position among consumers. This is extremely important for our industry. Mexico, however, is slightly different from the previous countries where I have worked in Asia, because consumers here have great knowledge of automobiles. Our challenge is to continue solidifying our position. In terms of production, in 2014 we started a new production facility in Celaya, Guanajuato. We have to supply high-quality products into the US market. Needless to say, the US market is the most important market for Honda. I expect 2018 to be a complicated year because it seems as though the US market has already peaked. The 2017 sales record may be the highest for a while, and growth in 2018 may be flat. In Mexico, sales dropped a fair bit between 2016 and 2017, and sales for 2018 indicate that it will be another tough year for the industry. However, I expect us to grow and innovate, offering new products and ensuring excellent customer service.



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