Sales of light automobiles in Mexico totaled 76,930 units during September, which represented its worst ninth month since 2011, revealed data from the National Institute of Statistics and Geography (Inegi).

The automotive industry in the country registered a monthly drop in sales of 1.7 percent in September, its lowest level since July 2020. Likewise, the commercialization of cars in the ninth month of 2021 was the lowest for a similar month since 2011, when 73 thousand 998 were sold. With respect to September 2020, car sales fell 1.1 percent.

The automotive market fell again in September, this time below 2020 levels when the country was suffering economic uncertainty due to the Covid- 19 pandemic, but this time manufacturers are suffering from the lack of semiconductors globally, port logistics problems, and other value chain setbacks, causing industry sales to retreat. However, since 2017, car sales in September register a setback.

Thus, September is the third consecutive month in which sales of new vehicles have receded, and this time it was at a lower volume since July 2020, when 72 thousand 921 units were marketed. Meanwhile, in the January-September 2021 period, 757 thousand 846 light vehicles were marketed, 14.1 percent more compared to the same period in 2020, according to the Administrative Registry of the Light Vehicle Automotive Industry.

According to analysts, uncertainty still prevails on the part of citizens and businessmen, who do not want to spend or invest in the purchase of a new car. The needs of the automotive sector have been considerable, since production has traditionally been based on "just-in-time" processes that, by definition, rule out the significant accumulation of parts inventories.

Mexico is a major producer of automobiles, integrated into this region. The shortage of chips in the country explains, to a large extent, the stagnation of manufacturing production during the year and the drop in the number of light vehicles produced, observed throughout the first nine months. The information comes from 23 companies affiliated with the Mexican Automotive Industry Association (Amia), Giant Motors Latin America, and Autos Orientales Picacho.

Due to the crisis derived from the pandemic that still affects the entire world, despite having a higher growth perspective than that recorded in 2020, this year the automotive industry has recorded the largest decline. This has caused the industry to modify its growth prospects downwards, although there is hope in view of the efforts promoted by the governments of the United States, Mexico, and Canada to reverse the situation.

Car sales in Mexico fall 28% in 2020

Car sales in the Mexican market fell by 28% annually in 2020 to a total of 949,353, the lowest figure since 2012, reported the National Institute of Statistics and Geography (Inegi). The data indicates that last year 368,578 fewer light vehicles were sold than in 2019 when sales were 1,317,931 units.

Inegi reported that December was the month with the highest car sales last year, with 105,135, although it is a figure 19.41% lower than that of the same month in 2019 when 130,460 were sold. "The recovery of domestic demand for light vehicles has been very slow, since sales to the public recorded in December 2020 still showed an annual contraction," explained Julio Santaella, President of Inegi.

The decrease in sales occurs in the midst of the Covid-19 pandemic, which has left more than 1.46 million cases and almost 129,000 deaths in Mexico. The crisis also caused a fall of 9.6% of the GDP in the first nine months of 2020, with a historical annual contraction of 18.7% in the second quarter of that year. The Ministry of Finance and Public Credit (SHCP) estimates that the economy contracted by nearly 8% in 2020, although it forecasts a 4.6% rebound by 2021.

According to Inegi, the months with the lowest car sales were April with 39,927, and May with 42,034, which coincides with the period in which the Mexican Government decreed a health emergency that suspended non-essential activities. The importance of the automotive industry is that it represents 3.8% of Mexico's GDP and 20.5% of its manufacturing GDP, more than any other sector, according to the Mexican Association of the Automotive Industry (AMIA).

The industry employs 980,000 direct workers and 3.6 million indirect workers, based on data provided by the AMIA, which includes 22 companies in the industry. The 2020 data represents the fourth consecutive year of declines after a historical maximum reached in 2016 when the industry sold 1,607,165 units. In 2019, light vehicle sales totaled 1,317,931, a 7.65% reduction from the 1,427,086 sold in 2018.