UPDATE: Mexico Auto Exports Gobbling Up More US Market Share

Mexico continued to flex its muscles as an automobile export platform in January, with sales abroad growing by double-digits compared with the year-earlier month in key markets such as the U.S., the Mexican Automobile Industry Association, or AMIA, said Wednesday.

Exports also rose to Canada, Latin America, Europe, Asia and Africa, although the non-American markets remained relatively small, AMIA said in its monthly breakdown on the state of the local auto industry.

Overall production of cars and light trucks rose 21% in January to 199,310 vehicles, while exports expanded by 45% to 165,046 units. Domestic sales, meanwhile, grew at a slower pace in January, rising 7.3% to 68,766 autos, AMIA said.

Light vehicle exports to the U.S. rose 36% last month compared with January 2010 to 116,429 units, representing a 14.2% overall market share among American consumers, AMIA numbers showed.

For full-year 2010, Mexican-made vehicles had a market share in the U.S. of 11%, which fueled Mexico's record production of 2.26 million units. Of those, nearly 1.28 million went to the U.S.

In other markets last month, Mexico auto exports to Canada rose by 14.4% to 13,513 vehicles, sales to other Latin American countries more than tripled to 19,190 units, and exports to Europe increased by 20% to 9,859 autos.

Mexico's auto export dynamic is not just related to the global economic recovery, but rather to capturing greater market share in the U.S. and elsewhere. For example, Mexico's overall vehicle exports last month were nearly 40% higher than in January 2008 before the crisis began.

AMIA's president, Eduardo Solis, cautioned that Mexico's big leap in U.S. market share may not be sustainable, since it comes partly on the introduction of two models not available in January 2010--the new versions of the Volkswagen Jetta and the Ford Fiesta--as well a big jump in exports of the Ford Fusion.

"We have a number that historically we've never had before," Solis said at a news conference. "Fourteen of every 100 vehicles sold in the U.S. are Mexican-made in the month of January. "Obviously, we can't say that it marks a trend, that it's going to continue like that, but it is very interesting that in our principal market we are growing in such a dynamic way."

Overall exports of cars, car parts, and other automotive components for the latest period available--January to November of last year--reached $45.63 billion, compared with imports of automotive goods worth $21.63 billion in the same period, Solis said. Mexico's auto-industry trade balance, he added, was now on par with oil as a source of foreign currency.

"We have said on various occasions that this surplus is much greater than foreign currency from tourism, from remittances [sent home by workers abroad], and finally up to November with a $23.996 billion net surplus, it is greater than the international commerce that we have from petroleum," Solis said.

Mexico prides itself on its vast oil wealth, but crude oil production has been slipping since 2004, and gasoline imports have been surging in recent years due to a lack of refinery capacity.

State-owned oil company Petroleos Mexicanos, or Pemex, said it had an energy-trade surplus of $17.88 billion in the first 11 months of last year and $19.55 billion for full-year 2010.

On relatively flat domestic car sales, Solis complained that imported used cars from the U.S., which he called "junkers," were distorting the Mexican used-car market, making it more difficult for Mexicans to sell their used cars in order to buy new ones.

Guillermo Rosales, head of government relations for the Mexican Association of Auto Distributors, said an estimated 430,000 used cars entered Mexico from the U.S. That compares with new car sales last year of 820,406 vehicles.

Although the cars enter legally, Mexican auto industry officials would like to see stricter requirements on safety conditions and emissions standards.

-By Laurence Iliff, Dow Jones Newswires; (52-55) 5980-5184, laurence.iliff@dowjones.com

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