In July 2023, Mexico emerged as China's primary destination for light-duty commercial vehicle exports, contributing significantly to an 84.2% year-on-year increase in China's total commercial vehicle export value, reaching CNY14.3 billion.
Furthermore, during the same month, Mexico ranked as China's second-largest export market globally, second only to Russia.
Mexico has experienced a remarkable surge in its imports from China in recent years, with total commercial vehicle exports from China to Mexico skyrocketing by 377.6% in 2022, cementing its position as the third-largest market for the entire year, according to Interact Analysis.
July's Snapshot of China's Commercial Vehicle Exports
In July, China's commercial vehicle exports continued their upward trajectory, witnessing an 18.6% year-on-year surge in export volume, totaling 67,000 vehicles.
Simultaneously, the export value soared to CNY14.3 billion, marking an impressive 84.2% year-on-year increase.
From January to July 2023, China's cumulative commercial vehicle exports reached nearly 400,000 units, boasting an export value exceeding CNY77 billion, reflecting remarkable year-on-year growth rates of 24.8% and 83.4%, respectively.
Analyzing the data by vehicle type, truck exports experienced a growth rate of 14% year-on-year in July 2023, amounting to 61,000 vehicles, with towing vehicle exports surging by a staggering 191%.
Diesel Rises and Gasoline Dips
Diesel vehicles remained dominant in exports, surpassing 51,000 vehicles and registering a substantial year-on-year increase of 24.7%, constituting 77.3% of China's total commercial vehicle exports.
In contrast, gasoline vehicle exports dipped by 12.9%, while other powertrain types saw a substantial increase of 154.2% year-on-year.
Among the top ten destination countries for commercial vehicle exports in July, these countries collectively accounted for two-thirds of the total export volumes.
Russia led the pack with a 29.7% share, followed closely by Mexico in second place with a 7.8% share.
Australia rounded out the top three export destinations, contributing to 5.3% of the total exports.
When considering export value, the top ten export destinations collectively represented 75.1% of the total, with Russia single-handedly responsible for over half of China's commercial vehicle exports during July 2023, claiming a dominant share of 51.3%.
Mexico Becomes Second-Largest Destination for China’s Commercial Vehicle Exports
Over the past two years China has witnessed a rapid increase in the number of commercial vehicles exported to Mexico.
In 2022, total exports to Mexico reached 46,000 units, marking a 377.6% surge, leading Mexico to become China’s third-largest destination for commercial vehicle exports (up from 11th place in 2021).
From January to July 2023, China’s exports to Mexico climbed, with an 82.0% year-on-year increase, surpassing 38,000 vehicles.
This achievement represents 81.8% of the total exports for 2022 and firmly positions Mexico as the second-largest market for China’s commercial vehicle exports.
Most commercial vehicles exported to Mexico are trucks, accounting for 95.8% of the total in July 2023, and most are light-duty trucks. In contrast, the export volume of buses is relatively small.
In terms of export value, China’s exports of commercial vehicles to Mexico for the whole of 2022 reached CNY3.9 billion, up by 432.8% year-on-year, leading Mexico to become the fifth-largest market for China’s commercial vehicle exports (ranked 18th in 2021).
From January to July 2023, export value reached CNY3.6 billion, marking a 129.8% year-on-year increase. As a result, Mexico became China’s third-largest destination for commercial vehicle exports in terms of export value.
Light-duty trucks consistently account for the highest number of commercial vehicle exports from China to Mexico
The Mexican Truck Market Thrives
Mexico's commercial vehicle market has been on a remarkable growth trajectory in recent years. Industry data from 2022 reveals that total registrations of commercial vehicles in Mexico reached an impressive 229,000 units, marking an 18.6% year-on-year increase.
From January to July 2023, commercial vehicle sales surged to nearly 160,000 units, showcasing substantial year-on-year growth at 29.4%.
Notably, light-duty trucks constituted more than 80% of this market. As of July 2023, light-duty truck sales continued to shine with a 28.8% year-on-year increase, while heavy-duty vehicles, including buses and trucks, also experienced year-on-year growth at 32.1%.
Imported brands dominate the commercial vehicle market in Mexico. Leading OEMs such as Freightliner, Kenworth, and Mercedes-Benz have established assembly plants or factories in Mexico.
Additionally, Chinese OEMs like Foton and Jiangling Motors (JMC) are steadily expanding their footprint, establishing assembly plants in the country.
Mexican Truck Imports on the Rise
Light-duty Trucks: China has surpassed the United States to become Mexico’s largest supplier of light-duty trucks. In the first half of 2023, Mexico’s imports of light-duty trucks from China saw an 85% year-on-year increase, and Chinese OEMs increased their market share in Mexico’s light-duty truck market by 11.7 percentage points, reaching 30.9%.
Companies like Chang’an Auto, Foton, and JMC have established a significant presence in the Mexican light-duty truck market.
Meanwhile, Mexico’s imports of light-duty trucks from the United States decreased by 11.8% year-on-year. Additionally, Mexico’s imports of light-duty trucks from Brazil, France, and India were also on the rise, with increases of 183.4%, 297.4%, and 201.6% respectively during the first six months of this year.
Heavy-duty Trucks: Japan is an important source of heavy-duty truck imports for Mexico. Data indicates that from January to June 2023, Mexico’s imports of heavy-duty trucks from Japan increased by 16.8% year-on-year, surpassing the United States to become the leading source of heavy-duty truck imports into Mexico, according to Interact Analysis.
Meanwhile, imports of heavy-duty trucks from the United States decreased by 22.7% during the same period, ranking second.
Additionally, Mexico’s imports of heavy-duty trucks from China more than doubled year-on-year, making China the third-largest source of imports.
In terms of truck manufacturers, major players in the Mexican market include international brands such as Freightliner, Kenworth, International, and Daimler. Chinese manufacturers like Shaanxi Automobile Group, China National Heavy Duty Truck Group, and First Automotive Works are gradually gaining prominence in the Mexican market.
Towing Vehicles: The United States is Mexico's primary source of towing vehicle imports. In the first half of this year, Mexico recorded cumulative sales of 12,000 towing vehicles, up by 31.5% year-on-year, with imports accounting for 47.2%.
As of June 2023, Mexico’s imports of towing vehicles from the United States witnessed remarkable 150.4% year-on-year growth, placing the US firmly in first place.
China is the third-largest source of towing vehicle imports to Mexico, with sales growing nearly fivefold yearly.
Mexico's Thriving Commercial Vehicle Market Attracts Global Attention
The expansion of Mexico's commercial vehicle market has not gone unnoticed by automotive companies worldwide.
Chinese automotive firms, leveraging their competitive edge of offering high-quality products at compelling prices, have successfully carved out a substantial presence in the Mexican market.
Mexico has now ascended to the position of being China's second-largest destination for commercial vehicle exports, while China has solidified its status as the primary source of light-duty truck imports to Mexico, a pivotal segment within the commercial vehicle market.
The Mexican market is also experiencing the ripple effects of the global electrification wave.
Local governments have implemented policies to incentivize the adoption of electric trucks, and major brands are launching a diverse range of electrified products.
In April of this year, Scania finalized its initial battery electric truck deal in Mexico, while Foton, in the same month, unveiled plans to establish its second electric vehicle manufacturing facility in Mexico through a partnership with CATL.
General Motors announced two new electric truck models to the Mexican market this August.
Additionally, under the United States-Mexico-Canada Agreement signed in 2020, Mexican factories enjoy tariff advantages in the United States.
This factor heightens the appeal for Chinese OEMs to establish manufacturing facilities in Mexico, presenting a substantial opportunity for Chinese enterprises to venture into the North American market.