Swedish automaker Volvo anticipates that 2018 will be a difficult year for the Mexican auto retail sector due to the presidential elections in July, but it is confident that the market will rebound so it has increased its investment in the country, said the company's director for Mexico in an interview with Reuters.
The company, owned by China's Zhejiang Geely Holding, believes that the fundamentals of Mexico are solid, so the market and the economy will continue to grow, Torben Eckardt said.
"The elections and the trade issue (due to the renegotiation of NAFTA) with one of the neighbors do not create a stable business environment, but the resources and momentum in Mexico are solid. We see good potential," Eckardt explained.
Last year, the premium car manufacturer began a restructuring plan in Mexico that led it to the closure of six distributors due to lack of quality, but it plans to increase its sales again this year after the opening of new exhibition centers.
During the first quarter, auto sales in the country were of 337,229 vehicles, which represents a decrease of 10.8% compared to the same period of the previous year, however, the luxury segment grew by 7.6% to 20,063 units, according to Mexico's Auto Dealers Association (AMDA).
In that scenario Volvo, whose full-year 2017 sales fell by 11.8% to 1,417 units, did better than the average during the first quarter of 2018, with an 18% sales increase to 380 vehicles. "I hope to grow at a 20% rate this year," Eckardt said.
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