New vehicle dealers in Mexico have warned that the Mexican government's program to increase imports of obsolete vehicles from the US and Canada only benefits cartels that control that activity.
"Thousands (of vehicles) continue to enter, benefiting only the cartels that control the introduction (import) and commercialization," said the executive president of the Mexican Association of Automotive Distributors (AMDA), Guillermo Rosales Zarate, which represents more than 2,500 new vehicle dealer agencies in the country.
The automotive industry is one of the largest consumers of steel and is the largest generator of foreign exchange for Mexico, and also one of the largest employers in the country.
In March, the program to legalize the imports of scrap vehicles into Mexico from the USMCA region began after the original project concluded on September 20, 2022 and now, AMDA said, the President of the Republic announced the "fourth extension to the (presidential) decree that it promotes regularization of contraband vehicles, which demonstrates its failure.”
"It is evident that there are organizations and people who wish to remain illegal in the absence of clear rules for not complying with the procedures," added the AMDA press release.
Zarate specified that from March 19, 2022 to March 21, 2023, 1.32 million illegal vehicles were imported, a figure higher than the sale of new vehicles in the same period, with 1.13 million units.
"Despite the more than one million regularized vehicles, there are now another million or more waiting for regularization," the organization said.
The worst thing AMDA said is that the Mexican government is considering legalizing the import of used vehicles from other countries outside the USMCA. This will further damage the resale price of vehicles legally marketed in Mexico due to the oversupply of vehicles, AMDA said.