| | |  Business News | December 2008 
Mexico's Car Dealerships See Sales Declining in 2009
 Paul Kiernan - Dow Jones Newswires
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Mexico City - Mexico's domestic new car sales could register a double-digit contraction next year as consumer credit dries up amid the global economic crisis, according to local dealerships.
The Mexican Auto Distributors' Association, or AMDA, said Monday that domestic auto sales could decline as much as 11.6% to 910,652 units under a worst-case scenario that sees 7% inflation and continued depreciation of Mexico's peso, which at MXN13.20 to the U.S. dollar is down around 18% from a year ago.
Under a more optimistic scenario that assumes a partial recovery of the peso and inflation at 3.7%, auto sales would fall by just 7.5% to 950,908 units, AMDA estimated.
In the first 11 months of this year, new car sales fell 5.1% from the year-ago period to 924,223 units, AMDA reported earlier this month.
Mexico's domestic auto market has grown increasingly dependent on financing in recent years, making it more vulnerable than ever to a credit crisis. More than 70% of new car sales this year have been purchased with credit, compared with 30% in 2000, according to the association.
"Unlike in previous crises that originated in Mexico, the current one is global," AMDA said. "In the current crisis, credit will face substantial restrictions due to the fact that financial institutions, auto companies and banks won't be able to find liquidity in the international market."
paul.kiernan(at)dowjones.com |
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