The Mexican automotive industry has lagged behind compared to other markets, including Brazil. One of the main reasons for the delay is the lack of sufficient incentives for people to renew the vehicle fleet. “We still have cars 25 years old.”
Joseph is the perception ChamaSrour, president of Chrysler Mexico, who talked with Excelsior on the problems facing the domestic market, on the recovery of production, exports, which are at record levels, and the challenges of the business.
Chrysler was one of the companies hit by the financial crisis, but business strategies globally later removed it. Fiat was one of the firms saving.
The executive says there is a problem that slows the sector in Mexico: used car imports from the United States: “That depresses the domestic market of new units even more.”
Brazil, however, has many incentives for local market and inspiring automotive financing.
In Mexico when selling a vehicle, assembly plant pays New Car Tax (ISAN), VAT of 16 percent, and the ownership and insurance. “It’s a stifling tax burden.”
He also commented, “We have achieved a successful program. We had one of scrapping it helped very little as they do not represent even one percent of sales. “
ChamaSrour said today the Interbrain Interest Rate Reference (TIIE, which is the rate that sets the Bank of Mexico to the lending institutions to manage money) is less than five percent. However, auto loans banks charge fees of up to 16 percent. “It’s a very high margin, are hard hit credits that few can afford.”
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