Advance by car | ELIMPARCIAL.COM

"Opportunities do not happen,

you create them. "

Chris Grosser

The national economy is only stagnant, but the domestic car market had a 7% annual decline in the first eight months of 2019, when sales fell from 916 thousand 438 to 851 thousand 947. This is a very strong blow for a of the most important industries in the national economy.

Exports have taken the automotive industry forward so far and in January-August they increased 1.5% annually; but be careful, because if only August is considered, there is a painful 12.7% drop. This emphasizes the need to strengthen the internal market.

The automotive industry, after all, employs about one million Mexicans.

It would be relatively simple to boost the market and help reactivate the shabby national economy. One of the measures that would have an immediate impact would be to facilitate the recovery of guarantees when someone does not cover the monthly payments of a loan to acquire a vehicle. This would significantly lower interest rates.

Many people buy vehicles on credit, but in our country car credit is very expensive. To finance a 60-month car in the United States, an average annual interest of 4.63% must be paid (Statista.com). In Mexico, rates range between 15 and 18% (Condusef).

One of the reasons for this difference is the difficulty in Mexico to recover a car in case of late payment. In the United States or Argentina, to mention only two countries, if the buyer stops paying, the creditor can recover the vehicle within 30 to 60 days. Creditors, in fact, usually have a copy of the car key; If the buyer does not pay, a representative simply goes to his home and takes the vehicle. In Mexico, it is necessary to go through a long and expensive judicial process and the recovery of the guarantee can take from one to two years. By that time the vehicle has already lost much of its value.

This difficulty in recovering the guarantee promptly, and saving an important part of the value of the vehicle, is one of the most important reasons for the high cost of credit to acquire vehicles in our Country.

Another measure that can help lift domestic sales is to stop the entry of used vehicles from the United States. These do not meet the safety and pollution requirements that are imposed on vehicles sold in our country. In the American Union they are worth almost nothing and that is why it is profitable to pass them to Mexico, where they reach a higher price. The Mexican industry maintains that this is an unfair competition. In some years the import of chocolate vehicles has reached 60 or 70% of the national production.

President López Obrador today dismisses the importance of economic growth, but this is a product of the fact that performance has been disappointing in his first year of Government. The president himself knows that he needs the economy to grow to generate new jobs and prosperity. One of the keys may be the automotive industry. Before the fall that is suffering it is important to take measures that resume their sales. The two requested by the industry are sensible: Facilitate the recovery of credit guarantees and thus lower interest rates, and force the cars that are imported into Mexico to meet the same safety and emission control requirements that are required of the cars They are manufactured in Mexico. It is not too complicated. The benefits instead can be enormous.

Pipeline

The Texas-to-Tuxpan gas pipeline from IEnova finally came into operation. This prevents an investment of 2.6 billion dollars from being thrown away and brings cheap gas from Texas to Mexico. Now the other gas pipelines are missing.

Twitter: @SergioSarmientoi