Free trade with Brazil will benefit five carmakers in particular, say experts
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The opening of the automotive trade between Mexico and Brazil will benefit mainly General Motors, Volkswagen, Nissan, Fiat Chrysler Automobiles (FCA) and KIA, automakers that dominate that market already, revealed experts consulted by El Financiero.
“These companies are the immediate beneficiaries because they dominate that market. They will have the opportunity to send more vehicles, but there is also a higher quality advantage of Mexican cars compared to those made in Brazil,” said Brais Alvarez, Automotive Account Manager for J.D. Power Mexico.
In 2018, GM, Volkswagen, Nissan, FCA and KIA represented 93.5% of total Mexican auto exports to Brazil, where they held a 61% market share.
Guido Vildozo, from IHS Markit, said the opportunity for Mexico is in segments such as SUVs, since many of the most popular subcompact models are already assembled in the South American country.
In the first two months of 2019, 7,754 light vehicles were exported to Brazil, 15.7% more than in the same period a year earlier, according to Inegi data. Throughout last year, 78,440 cars were shipped to that market, an increase of 59.9% compared to 2017, making Brazil the fourth most important destination for Mexican exports after the United States, Canada and Germany.
In 2018, General Motors was the company with the most units exported to Brazil with a total of 38,513 vehicles, with the most representative models being the Chevy Equinox and Trax.
The second automaker that shipped more vehicles to Brazil was Volkswagen with 16,166 units, where the Jetta stood out, although Tiguan SUVs were also sent. Nissan followed with 8,692 vehicles, FCA with 6,822 and KIA with 3,163 units.