VIEW FROM THE TOP |
GOOD TIMES AHEAD FOR MEXICO’S HEAVY VEHICLES MIGUEL ELIZALDE Executive President of ANPACT
Q: What challenges and opportunities will Mexico’s heavy-
operations in these regions, they have another 10 percent
vehicle segment encounter after USMCA?
covered. The remaining 30 percent can be met with normal
A: Mexico negotiated USMCA from a defensive position,
manufacturing operations with high salaries. As a result, the
focusing on retaining as much of the success it had achieved in
main area of opportunity for the Mexican supply chain is in
the development of an automotive industry. The country is the
hogging the other 55 percent.
sixth-largest producer and fourth-largest exporter of heavy vehicles worldwide and the No. 1 exporter of tractor-trailer
Q: How will USMCA impact used heavy-vehicle imports from
units worldwide. Through USMCA, the US government aimed
the US to Mexico?
to recover part of the automotive industry that had moved to
A: USMCA, as well as NAFTA before it, allows for the import of
Mexico in the last decades, but that strategy focused more on
used trucks and buses to Mexico. However, a decree published
the light-vehicle segment. ANPACT worked with the Mexican
by the Ministry of Economy requires these trucks and buses
authorities, and with its US counterpart, to differentiate the
to be 10 years of age or younger and to pay a 10 percent
light and heavy-vehicle sectors during negotiations. Our goal
tariff to enter the Mexican market. Authorities need to monitor
was to establish different transition times for the light and
compliance of this norm because truck documents are often
heavy-vehicle industries to comply with the new rules of origin
forged. ANPACT is in favor of importing used trucks inasmuch
defined in the new agreement. As a result of this strategy,
as these units are as new as possible. We are aware that the
truck and bus OEMs will have seven years to comply with
least safe and most polluting vehicles tend to be the oldest.
new standards, which will be parallel to the introduction of emissions standards in 2024 and 2027.
Q: How did Mexico’s heavy-vehicle industry fare in 2019? A: Production and exports of heavy units increased by 19.8
USMCA’s ratification will offer certainty for more companies
percent and 19.7 percent in the first 10 months of the year,
to invest in Mexico. ANPACT expects that investments for
compared to the same period of 2018, respectively, powered
final assembly will continue landing in Mexico. However, salary
by rising demand for new trucks in the US market. In terms
requirements will force OEMs to source engines, transmissions
of domestic sales, the heavy-vehicle segment has performed
and batteries from high-salary countries, which will harm
well, but ANPACT expects this trend will be short-lived.
Mexico’s attractiveness for the production of those systems. The country’s transportation industry faces challenges related Q: What are the most important changes in regional content
to truck robberies, rising fuel prices and vehicle cost increases
requirements that USMCA establishes?
as a result of new technologies and a volatile exchange rate.
A: USMCA requires heavy-vehicle OEMs to increase their
These factors would usually disincentivize fleet renewals. The
regional content from 62.5 percent to 70 percent and to
enforcement of NOM-044, however, dictates that all trucks
source 45 percent of that content from high-salary regions.
and buses produced in Mexico or imported to Mexico must
This means good and bad news for Mexico because while
meet Euro V or EPA 7 emissions standards since July 2019.
USMCA will provide new growth opportunities, some of them
This has forced transportation companies to anticipate truck
will stay in the US and Canada. There is room for heavy-vehicle
purchases. The pre-purchase effect will fade once this norm
OEMs to add more Mexico-made components as long as they
is enforced.
are not engines, transmissions and advanced battery packs. Salary content requirements will be met in three ways.
The National Association of Bus, Truck and Tractor Trailer
Companies that are producing engines, transmissions or
Manufacturers (ANPACT) represents heavy-vehicle and engine
advanced batteries in high-salary regions have already
manufacturers based in Mexico. It promotes the development
covered a 5 percent content requirement. If they have R&D
of the commercial-vehicle industry in the country
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