Mexico SUVs

David Oakley, Analyst, Americas Vehicle Sales Forecasts

17 May 2021

Will Mexico be left behind by SUV trends?

With the ever-increasing popularity of SUVs in recent years, some OEMs have slashed sedans and hatchbacks from their North American line-ups. In the US and Canada, this strategy makes sense. SUV sales surpassed those of Cars in Canada in 2015, and the US followed suit in 2016.

In Mexico, however, the Car is still king. Last year, Cars outsold SUVs by a ratio of more than 2:1. It is not that Mexico has been unaffected by the trend towards SUVs as the segment accounted for 25.1% of last year’s total sales, up from 19.1% in 2015. The overarching obstacle is cost, with SUVs still carrying a larger price tag than many high-volume Cars. This explains why Small SUVs are more popular than other size segments. They represented 60.2% of SUV sales in Q1 2021, compared to 19.3% in the US.

Mexico is dwarfed by its neighbour to the north, and so the features of its sales environment necessarily hold little weight in the boardrooms of some of North America’s largest manufacturers. With the demise of the Fusion, the Figo is Ford’s only mainstream Car sold in Mexico. Meanwhile, by 2023, Chevrolet will have slimmed down its Car offering to just the Onix, the low-volume electric Bolt, and – we believe – a sedan sourced from China to replace the model currently known in Mexico as the Cavalier.

Although both Ford and Chevrolet will seek to offset some of the losses in Car sales with SUVs, these brands seem to have jumped the gun with regard to Mexico’s readiness for such a shift. In the medium-term, therefore, we would expect OEMs that maintain a balanced portfolio of Cars and SUVs in order to prosper in Mexico, while there is a risk that buyers may turn increasingly to the used vehicle market to meet their needs.