| VIEW FROM THE TOP
INTERESTING TIMES AHEAD EDUARDO SOLÍS Executive President of AMIA
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Q: What is Mexico’s best opportunity to take advantage
The Mexican industry must advance its position in the
of the new conditions established by a NAFTA 2.0?
value chain. We must also bet on local engineering by
A: This treaty looks to modernize trade rules in North
investing more in R&D activities. Today, we are the industry
America. Considering that the automotive industry is the
that demands the most resources from CONACYT.
main success story stemming from the original NAFTA, our hope is that the new agreement maintains conditions to
Q: What would you say to investors to assure them about
ensure growth and progress in all three countries. There
Mexico’s position in the global automotive industry?
is a good opportunity to reach an agreement. However,
A: Mexico is ranked fourth in light-vehicle exports and we
the aspirations put on the negotiating table by the US
are tied with South Korea in sixth place in light-vehicle
government push us away from reaching a consensus that
production. The country has demonstrated its capabilities
could ensure Mexico’s ongoing success.
as a competitive automotive hub and now our goal is to define the best way to face the current trade challenges
Q: What has been the main achievement of the current
including the possibility of new tariffs that could be
federal administration regarding investment attraction?
implemented by the US on vehicle imports, similar
A: A key element was establishing the right conditions to
to those the country slapped on steel and aluminum
do business in our sector. Investment in the automotive
following Section 232 investigations on national security.
industry demands long-term certainty and the structural
These are interesting times and particularly now, many
reforms implemented by this administration have been
changes are coming. Whatever we can tell investors
crucial in ensuring this. The government has also been
today could change in the following months and they
successful in maintaining a stable economic environment,
must be aware of that. Nevertheless, we are optimistic
with sustained macroeconomics and a relatively stable
about the future.
exchange rate. Q: What diversification opportunities will the CPTPP Promoting access to international markets has also been
agreement create for the Mexican industry?
a success of this administration, along with constructing
A: We must recognize the real opportunities that this
a strong supplier base and boosting the development of
agreement will create for the automotive sector. Our
a capable world-class labor force.
biggest commercial relationship with the existing CPTPP members is with Canada and Japan at the moment and
Q: What should the industry prioritize to ensure
we already have a pre-existing agreement with the
continued growth?
latter. Australia or Malaysia could present interesting
A: One priority should be to strengthen the domestic
opportunities but we are talking about countries with
market. We need a healthy domestic market to keep
markets of between 1 million or 1.5 million units where
boosting the industry and so far, 2018 has seen a
we have no presence. Whatever sales we can generate
deceleration in sales of almost 10 percent. Just like Chile
will not solve our dependence on the US market. It is
and Argentina, what we need is to sell 20 new vehicles per
interesting to open new markets but these will not be
1,000 inhabitants and today, that rate is at 13 vehicles per
substantial, at least in vehicle production.
1,000 inhabitants. Controlling used-vehicle imports from the US is also critical because it has been one of the main
Q: What will be the impact on the national industry
contributors for domestic sales growth. Even though this
considering changes in preference toward SUVs and
has not been an excellent year, for the past three years
crossover models?
domestic sales have thrived thanks to strict controls at
A: Mexico will be flexible enough to face changes
the border and a strong financing strategy.
in international demand. If the market wants us to
