BMW believes that Mexico is still a challenging market
The president and CEO of BMW Group Latin America, Alexander Wehr, confirmed the brand's confidence in the development of the country and said: "We are with Mexico, in good times and in bad times."
In 25 years of history, BMW Mexico positioned itself as the first seller of premium vehicles in the market with more than 18,000 a year, in a context where half of this year will begin the production of units, and even then, the country is today for the German company a "challenging market".
With new international agreements, an internal market affected by high-interest rates and crime that inhibits the sale of premium vehicles, the president and CEO of BMW Group Latin America, Alexander Wehr, confirmed the brand's confidence in the development of the country and said In this regard:
"We are with Mexico, in good times and in bad".
And on the one hand, the automotive industry faces a new trade agreement between Mexico, the United States and Canada, as well as the possibility of restarting the free trade of cars with Brazil, whose current Economic Complementation Agreement (ACE) 55 concludes the next month of March.
Internally, there are two challenges for the brand, that of automotive financing with interest rates that grew around 40% in 18 months and the fight against crime, which for BMW has meant to stop selling up to 50,000 vehicles per year.
Alexander Wehr talked with Notimex from his offices in Mexico City, where he expressed his satisfaction with the growth of the company during the time elapsed.
The executive referred first to the region of his responsibility for the brand, where he says "we are happy and proud of the growth we had far and wide. We have marketed more than 45,000 BMW units alone in the region. It is a historical record and also with more than 10,500 units of Mini, also a historical record ".
In this context, he said, Mexico continues to be the main market, not only because of its size but also because of its potential, so "we have a lot of faith and commitment with Mexico."
Last year, the brand achieved a growth of over 18% with 18,501 units and 6,600 in Mini, a record sale as well.
By 2019 "we want to continue growing" and although the industry estimates a decline in sales of around 5.0%, BMW will continue its inertia by offering innovation and service.
"It is difficult, especially this year because there will be many significant changes in the political and commercial landscape and more challenging. I do see a slowdown in the sector and in the segment, I see a slight growth of between 5.0 and 10% with us as a leader not only in Latin America but in Mexico; we want to keep that crown."
In this context, he continued, "we are in the good and in the bad with Mexico. We have a lot of faith and commitment. This year we will celebrate 25 years in Mexico "and with a new plant in San Luis Potosí, which President Andrés Manuel López Obrador is expected to inaugurate in the middle of the year.
However, he did not fail to recognize that a key factor for growth in the domestic market will be the drive to finance units, which is inhibited by the increase in interest rates. That undoubtedly, he said, is a challenge that must be addressed in the national market.
And he did not fail to mention that both for BMW and for the entire premium segment of vehicles, the fight against crime is a crucial issue, since "clients prefer not to call attention" to the risk of being victims of criminal groups ".
He said that according to estimates of the owner, to resolve the issue of crime, BMW sales in Mexico would triple annually.
If Mexico is compared with other emerging markets such as Russia or Turkey, the participation of the premium segment in Mexico is still very low and is estimated at 3.0%, while in the other nations they reach almost 10%. "With this, I confirm that there is still a lot of potentials to grow."
He acknowledged that 2019 "will be a year with uncertainty. Now with this new government, it will be very interesting to observe the path that they follow. Also the political and economic perspective ".
The director also referred to the development of the market in the North American region with Mexico, the United States and Canada Treaty, called T-MEC, as well as trade with the other countries of the Latin American region.
While the T-MEC does not land in the congresses of the countries involved, BMW also closely observes the course that the ACE 55 has with Brazil, whose current agreement limiting Mexican automotive exports to that country concludes next March.
"We are interested in seeing the developments that will take place between the United States and Mexico, the United States and Brazil, as well as Mexico and Brazil. We believe a lot in all the regions where we operate "and Latin America is a very potential area.
Therefore, he indicated, the ACE 55 is extremely important for the brand that in principle has a motorcycle plant and another automobile in that region.
Meanwhile, part of the export of Series 3 that will be manufactured in San Luis Potosí from this 2019 could be destined for that country, although he warned in this regard that it depends on the way in which the vehicles are traded between both nations. "I consider it important to facilitate the export of Series 3 to Brazil, but it depends on the development of free trade."
"Hopefully and Mexico will follow this path of opening up to other countries and allowing direct investment that is very important, especially in our sector, because today automotive investments represent 30% of all investments. It is a jewel, an achievement, an advance of the country that opens up and works in value chains, instead of national borders, "he argued.
And although he mentions that they are observant of the development of the new administration, the executive added that a company with presence in 140 countries and more than 30 plants on all continents, "what we say is that normal is abnormal, what is expected is the unexpected".