Background on the Automotive Industry and AMDA
The Automotive Distributors Association of Mexico (AMDA) is a key organization representing automobile distributors in the country. Guillermo Rosales, AMDA’s president, has been vocal about the current trade uncertainties affecting Mexico’s automotive sector. His insights are crucial as the industry accounts for a significant portion of Mexico’s GDP and employment.
Current Situation and Trade Tariffs
Mexico narrowly avoided an escalation of tariffs for 90 days, thanks to the efforts of Mexico City’s mayor Claudia Sheinbaum in postponing the implementation of 30% tariffs threatened by former U.S. President Donald Trump. However, the uncertainty lingers as the trade environment remains volatile.
AMDA President’s Perspective
Rosales acknowledged the temporary relief from steeper tariffs but emphasized that the uncertainty will persist until the renegotiation of the Trades Mexico, United States, Canada (T-MEC) agreement concludes in 2026.
Mexican Automotive Market Overview
The Mexican automotive market is currently in a deceleration phase, with the industry expecting to maintain this trend through 2025 due to the slowdown in Mexico’s economy. Despite a slight improvement in GDP during Q2 2025 (just above 2% and better than analyst estimates), Rosales argues that this growth is insufficient to revive the vehicle purchasing engine, a crucial component of Mexico’s economy.
Trade Tariff Impact on the Automotive Sector
Rosales clarified that, although the average 15% tariffs have presented challenges for the automotive industry, they have not caused a severe crisis. The current situation is more of a stagnation rather than a catastrophic decline in production, exports, or domestic sales.
Key Questions and Answers
- What is the current state of Mexico’s automotive market? The Mexican automotive market is experiencing deceleration, with the industry anticipating this trend to continue through 2025 due to Mexico’s economic slowdown.
- What tariff relief has Mexico received? Mexico narrowly avoided an escalation of tariffs for 90 days, thanks to the efforts of Mexico City’s mayor Claudia Sheinbaum in postponing the implementation of 30% tariffs threatened by former U.S. President Donald Trump.
- How will the T-MEC renegotiation impact the automotive sector? The uncertainty surrounding the T-MEC renegotiation, expected to conclude in 2026, will likely create a significant drag on Mexico’s economic recovery.
- What is the current impact of tariffs on the automotive industry? While 15% average tariffs have posed challenges, they have not led to a severe crisis in the automotive sector. The industry is more in a state of stagnation rather than a catastrophic decline.
