Stefan Kurschner, president and CEO of Daimler Commercial Vehicles Mexico

Mexico truck market keeps growing

Dec. 8, 2016
Showing double-digit growth for the third year in a row, heavy-duty sales up 20%

PUERTO VALLARTA, MEXICO.  For the third year in a row, the Mexican Class 8 truck market will show double digit growth, beating 2015 sales by 20% if it hits the projected 26,000 units, according to Stefan Kurschner, president and CEO of Daimler Commercial Vehicles Mexico. Overall Class 4-8 truck sales are expected to near 33,000 units for an 18% increase over last year.

Forecasting similar growth in 2017, Kurschner said the domestic market here is strong enough to continue growing well beyond 30,000 trucks even following annual sales growth of 12% to 14% over the last three years.

“The [truck]market is not as big as it should be for the size of the overall domestic market,” he said at a press briefing for U.S. and Mexican journalists. Renewal of the Mexican truck fleet, which currently has an average age of 17.2 years and more than 150,000 units over 20 years old, along with continued steady GDP growth and a strengthening of oil prices should support a normal annual Class 4 to 8 sales of around 60,000, according to Kurschner. “We’ve seen three years of good growth and see the same to come. No matter what, we will see growth.”

Questioned about possible trade disruptions between Mexico and the U.S. under the new Trump Administration, a Daimler Trucks North America spokesperson declined comment, saying “it is not our policy to comment on political speculation.” He added that DTNA “as any good corporate citizen, will continue to engage in constructive dialog with governments in all countries in which it operates.”

A second company spokesperson pointed out that Daimler has deep roots in both countries, operating in Mexico for 30 years and in the U.S. for 75 years, where it currently has over 22,000 employees.

Daimler has two truck plants in Mexico including a 6-year-old facility in Saltillo building the current Freightliner Cascadia for both domestic and international markets.

In other Mexican truck market news, Kurschner welcomed the release of draft emissions regulations just three weeks ago. Known as Regulation 044, it calls for new trucks to meet U.S EPA 2013 emissions levels by 2018 with a two-year transition period that would allow OEMs to also sell trucks meeting EPA 2007 levels. Currently new trucks sold in Mexico must meet EPA 2004 emissions standards. With local Mexican states and municipalities often creating their own emissions standards, “the lack of clear definition makes it a bit difficult, but at least we have a draft on the table and a timeline to work with,” Kurschner said.

Daimler is also actively expanding its Select Truck dealership network in Mexico, seeing it as part of the solution to bringing down the national fleet’s average age. While 2014 and 2015 saw a spike in illegally imported trucks that did not meet Mexico’s emissions standards for used equipment, that problem is now largely under control, and Kurschner believes there is an annual market for 15,000 to 20,000 newer used trucks.

A current effort offering incentives to scrap older trucks “has had some success” in modernizing the Mexican fleet, he added, pointing to about 1,000 Daimler sales through the program. “It has some limitation, but we believe we still need the incentive program to help renew the fleet,” Kurschner said.

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