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US auto brands lose Mexico market to Asia, Europe

Mexico City, Mexico — During the last 10 years, popular US automakers have lost their footing in the Mexican market by nearly 50 percent, which has been taken over by Asian and European brands.

US automakers Ford, General Motors and Fiat Chrysler Automobiles (FCA) lost approximately half of their market share in Mexico compared to Asian and European brands.

In 2008, American brands dominated the sale of cars in Mexico with nearly half of the market, but in the first four months of 2018, the Mexican Association of the Automotive Industry (AMIA) says they now have only about 25 percent of the market.

The AMIA says that Asian brands such as Nissan, Toyota and Honda, which 10 years ago had only 35 percent of the market now have 51 percent. They say that over the last 10 years, European brands have captured 23 percent of the Mexican car-buying market, leaving US brands with just over 25 percent.

AMIA says that the construction of the Asian plants in Mexico between 2014 and 2017, which were investments exceeding $2.6 billion USD, boosted its presence in the market. In addition, Mazda, KIA, BAIC and Toyota began aggressive commercial advertising with financing plans and longer warranty periods than the American brands.

In 2014, Mazda opened a plant in Salamanca, Guanajuato to produce the Mazda 3. That same year, Honda opened its second factory in Mexico to assemble Fit and HR-V models in Celaya.

In 2016, Korean KIA opened its assembly plant in Pesquería, Nuevo León where it produces the Forte, Rio and Hyundai Accent models, while in 2017, BAIC began assembling the D20 and X25 models at a plant in Veracruz.

Toyota, for its part, is building a factory in Guanajuato that will begin production in 2019.

According to experts, Asians have a better understanding of consumers, mainly millennials, who prefer greater fuel efficiency and innovative designs.

“Asian brands are more focused on taking advantage of market knowledge, consumers tell us. In design, American brands make attractive models, but they have to continue working on other aspects such as knowing the clients,” said Gerardo Gómez, senior director and country manager of JD Power de México.

The same consultant revealed that 46 percent of the purchase decision has to do with the quality of the car and the after-sales service offered by the brand. For millennials, a decisive factor (16 percent) is fuel consumption, followed only by design (14 percent).

This year, brands dominating the Mexican market include Nissan with 23 percent followed by Toyota with 7.7 percent and KIA with 6.9 percent, which is the fifth most commercialized brand in the country.