Background on AMDA and Relevant Parties
The Asociación Mexicana de Distribuidores de Automóviles (AMDA) is a crucial organization representing automobile dealerships in Mexico. Recently, AMDA, along with consulting firms Jato and Urban Science, released a report titled “Financiamiento y Compradores de Vehículos Ligeros enero-septiembre de 2025” (Financing and Light Vehicle Buyers January-September 2025). This report sheds light on the significant decline in light vehicle purchases through financing, which has dropped by 60.4% from nearly 70% in the same period last year.
Economic Uncertainty and Impact on Retail Sales
The report attributes this decline to economic uncertainty, causing retail sales to stagnate. As a result, dealerships have struggled to move their inventory. However, fleet and corporate sales have emerged as a buffer, allowing dealerships to acquire inventory and provide short-term stability through immediate cash payments.
Chinese Brands Dominate Fleet and Corporate Sales
Eric Ramírez, director of Urban Science Latam, highlighted that Chinese brands have capitalized on fleet and corporate sales channels. These brands maintain a high percentage of fleet sales, often above 15% and sometimes exceeding 20%. This trend has been adopted by various agents, including large companies, leasing firms, and even government entities.
Government Purchases of Hybrid Pickups
Local governments, such as city councils, have been active in replacing public safety patrol units with hybrid pickups. Both Chinese brands like BYD and JAC, as well as Ford and RAM, have seen increased demand from these government entities.
State Financing Opportunity Index
The report introduced the Índice de Oportunidad de Financiamiento estatal (State Financing Opportunity Index) by segment, revealing that the national average for credit participation in new unit purchases by state (excluding fleet sales) reached 72.7%.
Inclusion of Fleet Sales Lowers Overall Participation
When fleet sales, primarily purchased in cash, are included, the overall participation percentage drops to 60.4%. Only seven entities have managed to achieve or surpass the ideal 70% participation rate for a market like Mexico, according to AMDA President Guillermo Rosales.
Credit Automotive Financing as a Market Stabilizer
Rosales emphasized that banks and specialized automotive credit financiers have been crucial in sustaining the light vehicle sales market for at least the last ten years. This financing has acted as a shock absorber during economic cycles, providing stability amidst monetary fluctuations.
Shift in Financing Preferences
For the first time, financing for subcompact cars has surpassed SUVs, which previously led the automotive credit market. This shift reflects the stagnant economy and consumers’ preference for lower-priced vehicles with extended 72-month repayment terms.
Key Questions and Answers
- What is the main issue discussed in this report? The significant decline in light vehicle purchases through financing, which has dropped by 60.4%.
- Who are the key players mentioned in this report? The Asociación Mexicana de Distribuidores de Automóviles (AMDA), consulting firms Jato and Urban Science, and various automotive brands including Chinese manufacturers.
- How have Chinese brands been impacted by the economic uncertainty? Chinese brands have capitalized on fleet and corporate sales channels, maintaining high percentages of fleet sales.
- What types of vehicles have seen increased demand from local governments? Hybrid pickups, particularly from Chinese brands like BYD and JAC, as well as Ford and RAM.
- What is the State Financing Opportunity Index, and what does it reveal? The index measures credit participation in new unit purchases by state, with a national average of 72.7%. Including fleet sales lowers the overall participation percentage to 60.4%.
- How has the automotive credit market been stabilized? Banks and specialized financiers have played a crucial role in sustaining the light vehicle sales market, acting as a shock absorber during economic cycles.
- What shift has been observed in financing preferences? Subcompact cars have surpassed SUVs in terms of financing, reflecting a stagnant economy and consumers’ preference for lower-priced vehicles with extended repayment terms.
