High interest rates have begun to wreak havoc on the automotive industry, becoming a decisive factor in whether people buy or cancel the purchase of new cars in Mexico.

The president of the Mexican Association of Automotive Dealers (AMDA), Guillermo Rosales Zarate, has reported that banks and financial institutions charge an average interest rate of 18% to 20% when granting a car loan.

As a result, people interested in acquiring a new car through a loan or financing must pay interest rates that are three times the current level of general inflation in the country.

Last week, Inegi reported that the National Consumer Price Index (INPC) reached a level of 6.85%, while interest rates on car loans are rising by 20% or more.

Rosales Zárate explained that the high interest rates reported by automotive financing are due to the increase in the reference rate of the Bank of Mexico (Banxico), which has already reached 11.25% and has pushed banks to raise the interest rates they charge their customers.

The automotive market “cools down”

During the presentation of the results of the automotive industry at the end of the first quarter of 2023, the president of the AMDA said that the rise in interest rates will cause “a cooling” in sales of new cars in Mexico.

He acknowledged that the latter situation affects the purchasing decisions of Mexicans and, precisely, these effects will cause the cooling of the market to materialize during the second half of the year.

“The monetary policy announcements themselves make us foresee that Banxico will maintain its rate – at 11.25% – and even anticipate that there will still be one more increase at the next meeting – of the Board of Governors – of the institution.

“And that gives us a lower availability for consumers to face the hiring of credit,” which ultimately impacts or raises the cost of vehicles, said Guillermo Rosales.

Although the executive clarified, “I am not saying that there will be no sales, they will continue to increase compared to last year, but these growth rates of 25% in the placement of vehicles and 15% in credit – reported in the first quarter of 2023 – will be decreasing.

Delayed deliveries boost sales

AMDA reported that at the end of the first three months of the year, sales of new cars and trucks recorded very positive figures, with an average growth of 24.4% compared to the same period in 2022.

It specified that the automotive agencies invoiced 315,126 vehicles between January and March, with increases of 49.2% in the placement of compact vehicles, 26% in multipurpose cars, 18.5% in luxury units, and 6% in subcompacts.

However, the association said that these figures are the result of a combined effect between the decrease in waiting times and the backlog of orders from the second half of 2022.

It pointed out that although contracts and orders were signed last year, sales are counted from the delivery of the units. It pointed out that the latter process decreased from four to two months on average, although on some occasions, the delays were up to six or eight months.

New car market in Mexico

The director of the Mexican Association of the Automotive Industry (AMIA), Odracir Barquera, indicated that at the end of March 2023, the following had been recorded:


  • Annual growth of 13.1% and 346,124 units assembled in March.
  • Quarterly annual increase of 8.6% and a cumulative total of 922,177 vehicles.
  • Fall of 1.3% compared to March 2019, before the pandemic.


  • Annual growth of 3.9% and 272,687 units exported in March.
    Quarterly annual rebound of 8.9% and a cumulative total of 741,306 vehicles.
    Fall of 16.3% compared to March 2019, before the pandemic.

Sales in Mexico:

  • Annual growth of 24.8% and 118,801 units in March.
    Quarterly annual rebound of 24.4% and a cumulative total of 315,126 vehicles.
    Fall of 5.4% compared to March 2019, before the pandemic.

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