Automotive financing gains ground in November

Despite the increase in prices and interest rates, automotive financing in Mexico increased slightly last November by 1.1 percentage points compared to the same month of the previous year, reaching the level of 58.6% of all purchases of new light vehicles were made at through a bank or a brand finance company, AMDA reported.

When presenting the financing report to November 2022 by AMDA, JATO and Urban Science, they reported that by eliminating the purchase of fleets of units, the credit index rose from 58.6 to 67.9% at the national level, which is close to the level optimal, according to the growth in demand.

At a press conference, Guillermo Rosales, president of the Mexican Association of Automotive Distributors (AMDA) explained that the increase in interest rates has led to a restriction in monetary policy, and despite this, financial companies have absorbed the changes to avoid impacts on consumers.

He specified that the rise in the reference rate of the Bank of Mexico (Banxico) that began in June 2021 in its fight against the high levels of inflation, and that lasted in restrictive territory in 2022, “are depleting the margin that banks and brand finance companies had to reduce their profits in financial credits”.

Also, added the president of AMDA, it is necessary to have a public vehicle registry that really works in order to reduce credit placement risks. In Mexico, every time a financial institution requires filing a lawsuit or a lawsuit to be able to recover an unpaid credit, 2 or 3 years can pass and when the pledge is recovered, the vehicle is in conditions that the value is well below below the amount owed. Eric Ramírez, representative of Urban Science, recommended modifying the financing strategy of brands and banks for self-financing, since in 2023 the upward trend will continue.

“We would have to see the leasing that rises at double the speed and some others, that raise interest rates, because that will be fuel for self-financing when the cost of money is high and the banks buy contracts,” he said.

Interest rates have already been depleted (in banks and brand finance companies) and the forecast is that in the coming weeks we will see a growth rate in final consumer interest rates in the purchase of cars with more elevation -warned the leader of the AMDA, which will be a limiting factor, both in the placement of credit and also directly in the sale of vehicles.

At the time, Gerardo San Román, director of Jato, mentioned that financial companies have already reinvented themselves and offer an immense range of sales options, but it is time for the automotive market to mature, for mechanisms such as financing through the lease.

According to the percentage of participation of buyers by segment, compact cars maintained the first position in the ranking with 64.3%, followed by subcompacts with 63.8%, SUVs with 60.4%.

lilia.gonzalez@eleconomista.mx