Mexico was the top market for light-duty commercial vehicle exports in China during July 2023, helping to drive up China’s total commercial vehicle export value by 84.2% year-on-year to CNY14.3 billion. Over the month, Mexico was also the second-largest export market overall for China, after Russia. The country has seen its purchases from China soar in recent years, with total commercial vehicle exports from China to Mexico leaping 377.6% in 2022, making it the third largest market over the year.

Market overview for China’s commercial vehicle exports in July

In July, China’s commercial vehicle exports continued to rise, with the export volume increasing by 18.6% year-on-year to 67,000 vehicles and the export value reaching CNY14.3 billion, representing an 84.2% year-on-year increase. From January to July 2023, China’s commercial vehicle exports totaled nearly 400,000 units, with the export value exceeding CNY77 billion, registering year-on-year growth of 24.8% and 83.4%, respectively.

From a vehicle type perspective, truck export growth slowed to 14% year-on-year in July 2023, or 61,000 vehicles, of which exports of towing vehicles were up by 191%. Meanwhile, bus exports increased by 104.2% compared with the same period last year to 6,000 vehicles. Diesel vehicles accounted for a significant portion of exports, with volumes exceeding 51,000 vehicles. This represented a year-on-year increase of 24.7% and accounted for 77.3% of total commercial vehicle exports from China. Gasoline vehicle exports, on the other hand, decreased by 12.9%, while other types of powertrain saw a significant year-on-year increase of 154.2%.

In July, the top ten destination countries for commercial vehicle exports accounted for two-thirds of total export volumes. Russia led the way with a commanding 29.7% share, followed by Mexico in second place with a 7.8% share, and Australia was the third-largest export destination, accounting for 5.3% of exports. In terms of export value, the top ten export countries accounted for 75.1% of the total, with Russia alone responsible for more than half of total commercial vehicle exports from China (51.3%) during July 2023.

Mexico becomes the 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 remarkable surge of 377.6%, leading Mexico to become China’s third-largest destination for commercial vehicle exports (up from eleventh place in 2021). From January to July 2023, China’s exports to Mexico continued to climb, 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.

The majority of commercial vehicles exported to Mexico are trucks, accounting for 95.8% of the total in July 2023, and most of which 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 in terms of export value (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 is booming

In recent years, the commercial vehicle market in Mexico has experienced rapid growth. Industry statistics show that in 2022 total registrations of commercial vehicles in Mexico reached 229,000 units, up by 18.6% year-on-year. From January to July 2023, commercial vehicle sales totaled nearly 160,000 units, representing 29.4% year-on-year growth, with light-duty trucks accounting for over 80% of the market. As of July 2023, light-duty truck sales saw a 28.8% year-on-year increase, while heavy-duty vehicles (including buses and trucks) also recorded significant year-on-year growth of 32.1%.

The commercial vehicle market in Mexico is dominated by imported brands. OEMs such as Freightliner, Kenworth, and Mercedes-Benz have assembly plants or factories in Mexico, while Chinese OEMs have been gradually expanding their presence, with Foton and Jiangling Motors (JMC) also establishing assembly plants in the country.

Registration of commercial vehicles have climbed sharply in Mexico over recent years

Furthermore, the commercial vehicle market in Mexico relies heavily on imports. For instance, light-duty trucks, which account for 80% of total commercial vehicles sales, saw imports reach as high as 54.5% in the first half of 2023. Meanwhile, in the first half of this year, registration sales of heavy-duty trucks reached 26,000 units, with imports accounting for 70.7% of that total, marking a 7.7 percentage points increase compared with the same period of last year. Customs data reveals that in the first six months of 2023, Mexico imported nearly 150,000 trucks, representing year-on-year growth of 18.3%. Among these, light-duty truck imports stood at 133,000 units, a 15.6% increase compared with the same period last year and accounting for 89.6% of total truck imports, while heavy-duty truck imports reached 15,000 units, rising by 47.6% year-on-year.

The landscape of Mexican truck imports

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. 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 (Shacman), China National Heavy Duty Truck Group (Sinotruk), and First Automotive Works (FAW) are gradually gaining prominence in the Mexican market.

Towing Vehicles: The United States is the primary source of towing vehicle imports for Mexico. 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% of this total. 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 stands as the third-largest source of towing vehicle imports to Mexico, with sales growing nearly fivefold year-on-year. Among OEMs, Scania from Sweden and Kalmar from the United States hold the top two positions, while Chinese OEMs like Shacman and Sinotruk also become important players in the local towing vehicle market.

Final thoughts

The strong growth of the commercial vehicle market in Mexico has captured the attention of automotive companies from around the world. Chinese automotive companies, leveraging their competitive advantage of offering quality products at competitive prices, have successfully established a strong presence in the Mexican market. Mexico has now become the second-largest destination for China’s commercial vehicle exports, and China has secured the top position as the leading source of imports of light-duty trucks to Mexico – the largest segment of the commercial vehicles market.

The Mexican market is also witnessing the effects of the global electrification boom. Local governments have introduced policies to encourage the purchase of electric trucks, and major brands are launching a variety of electrified products. Scania closed its first battery electric truck deal in Mexico in April this year and, in the same month, Foton announced the plan to establish its second electric vehicle factory in Mexico in partnership with CATL. This August, General Motors announced the introduction of two new electric truck models to the Mexican market.

Furthermore, as per the United States-Mexico-Canada Agreement (USMCA) signed in 2020, Mexican factories can enjoy tariff advantages in the US, making it more attractive for Chinese OEMs to establish manufacturing facilities in Mexico and representing a significant opportunity for Chinese companies to enter the North American market.