MEXICO CITY: BMW’s Mexico chief expects anemic sales in the country’s auto market next year, hurt by expected peso weakness against the US dollar and subdued economic growth as US President-elect Donald Trump ratchets up trade tensions.
The overall Mexican new car sales will likely remain little changed in 2025 after double-digit gains this year, BMW Group Mexico chief executive officer Diego Camargo said in an emailed interview.
The luxury vehicle market is seen “maintaining its volume” after posting likely growth of 0.5% to 1.5% in 2024, he said.
Threats from Trump to impose 25% tariffs on goods from Mexico and an additional 10% tariff on Chinese imports is adding to underlying uncertainty about the outlook for Mexico’s economy and currency, he said.
The potential for a wider trade war, including protectionist measures by Mexico, could also impact demand, Camargo noted.
Previous tariffs imposed by Mexico on steel and aluminum imports from countries with which it didn’t have trade agreements had an inflationary effect that rippled throughout the automotive supply chain, he said.
BMW’s cross-border trade may get caught in that crossfire. About 30% of BMW’s sales in Mexico are sport utility vehicles imported from a factory in South Carolina, according to a company spokesperson.
The carmaker also exports an unspecified number of vehicles made in Mexico to over 80 different destinations, including the United States.
Analysts in Mexico have been quick to revise down their economic growth predictions for next year following mounting trade tensions.
The country already is expected to see a fourth straight year of diminishing economic growth and potentially steep levies from the United States could impact nearly 11% of its gross domestic product, according to an estimate by Bloomberg Economics.
BMW Group’s sales in Mexico, including its BMW and Mini branded-cars grew 1.1% in the first 10 months of the year, to reach 13,893 units, according to data from the Mexican Association of Automotive Distributors.
Last year, the German brand sold 17,703 vehicles in the country, compared with the record 362,244 vehicles it delivered in the United States. — Bloomberg
