Mexico limits tariffs break to established local carmakers

Mexico has announced that a new five-year tariff break for imported car parts will only be granted to automakers that already have production facilities in the country. This clarification was issued after industry analysts expressed concerns that the decree could potentially pave the way for Chinese brands or other new entrants in the car market.

On Tuesday, a decree was published that lowered the import tariff on certain assembly parts from 10% to zero. This move raised doubts among experts, who speculated that Chinese automakers like GAC and JAC might stand to benefit from the reduced tariffs.

Following the clarification from the economy ministry on Friday, it was revealed that the measure is exclusively applicable to companies that have operational facilities in Mexico and meet additional specific criteria. The ministry confirmed that 11 car manufacturers are eligible for the scheme, though they refrained from naming them. Based on industry data reviewed by Reuters, these firms are most likely to include Audi, BMW, Ford, General Motors, Honda, Kia, Mazda, Nissan, Stellantis, Toyota, and Volkswagen.

Despite the high tariffs imposed to curb the growth of Asian imports, Mexican sales of Chinese-brand vehicles surged by nearly 30% during the first half of the year.