The commercial banks began to expand lending buy vehicles after two and a half years of inactivity.
The latest information from Bank of Mexico (Banxico) shows that private banks granted 155 billion pesos in auto loans last November and represents an increase of 0.4% compared to the same month in 2021, after deducting inflation.
This is the first growth since May 2020, as well as the best result since April of the same year, when auto financing rose 2.3% and the pandemic had just begun.
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Banks have tightened lending as Mexico’s auto market has contracted since before the pandemic.
In the opinion of Marco Daniele Ariasanalyst at Monex, last year’s increase in November responds to a lagged effect of automotive lending, as during the health crisis caused by mortgage lending Covid-19 was more resilient, but vehicle consumption had a more erratic behavior, due to the affectations in its production due to the shortage of semiconductors.
“The effects on auto credit have little to do with the determinants of consumption and income. Last year we saw that consumers had a lot of desire and resources to consume clothes and food, as well as durable goods, such as cars. For us, the issue that was different in the car loan, compared to other types of credits, was the problems with the production,” Arias explained to THE UNIVERSAL.
In January 2022, the variant omicron of the coronavirus has caused disruptions in the value chain, resulting in technical strikes for a few weeks at some auto plants and suppliers.
In such an integrated industry, this was a major blow to the volume of automotive production and, consequently, to the supply and availability of products to sell.
Until last April 2022, the value chains were fully integrated and towards the end of the year the auto plants started operating very close to their potential, the analyst added.
Charles GomezIntercam analyst, highlighted that Mexicans should continue to buy cars in the coming months, as it is a necessity in several cases.
“The only challenge we would see for market downturns or people stopping consuming is that the recession is bigger than expected,” the pundit told this newspaper.
“We consider it the recession will hit in late 2023 to Mexico. If this happened, people would have to be more careful with the use of their money and consumption of new cars should decrease and with it auto credit,” she added.
The latest information from National Commission for Banks and Securities (CNBV) indicates that the Multipurpose Finance Company (Sofom) Fin Útil offered the most expensive car loans on the market last August, with an average interest rate of 17% per annum. Followed by Volkswagen Bank, with 16.6% and Sofom Inbursa, with 16%.
At the other extreme, with the cheapest financing, is Banobras, whose interest rate was 5.5%. continue second Citi Banamex, with 9.4%; and in third place appears Bansí, with 10%.
The Mexican Association of Automobile Dealers (AMDA) reported that 79% of auto loans were made by the automakers’ own brand finance companies from January to October last year; 19% from banks and 2% from self-financing.
The most active banks in terms of auto credit were BBVA, with an increase of 16% for the purchase of new cars and 39% for the purchase of used cars until October.
Also, Banorte, an increase of 1% for the financing of new cars and 42% for that of used cars; Banregio, with an increase of 5% for the purchase of new cars and a decrease of 24% for the purchase of used cars.
Santander has also significantly increased lending, with a 132% increase for the purchase of new cars and 43% for used units.
According to analysts of BVA, the dynamism shown by formal employment and real wages has made it possible to sustain the performance of the various sectors of consumer credit. However, they see incipient signs of deterioration in some segments of the portfolio.
Despite closing last year with an increase in new unit sales compared to 2021, the automotive industry in Mexico is still going through a difficult environment and is recovering its pre-2021 levels. covid-19 pandemic could be achieved by 2024, analysts admit.
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