He has won the Donald Trump. What will happen with the car industry?

Donald Trump

It has been a shock, yes, but it is what it is. Donald Trump will be the next president of the united States. We're not going to talk about what consequences it may have on the balance of global geopolitical (devaluation of the dollar to unprecedented levels, more bombings, etc) if her behavior as president is the same as it has shown in the campaign or if he gets to keep his promises. We will just see a little bit more in detail what effects it may have on the automobile industry.

And is that if you put up some of their electoral promises on issues of the economy, such as the renegotiation of the free trade agreements NAFTA -North American Free Trade Agreement (between Mexico, the united States and Canada), the consequences that would have on the industry in mexico and the european manufacturers are not very encouraging.

The German manufacturers, are very exposed

Audi Mexico

Over the last few years and thanks to the NAFTA agreement, Mexico and its labor is excessively cheap but qualified has become a region that is very attractive to produce vehicles to supply the u.s. market. In 2015, Mexico was the eighth largest producer of automobiles with 3,56 million units (double that of France).

If finally Trump it imposes heavy tariffs on products imported from Mexico (he spoke of a 35 %), investments made in the aztec country by the most manufacturers lose sense. BMW has just opened a factory for the production of the 3 Series (an investment of 2,200 million us dollars) and Audi, is nearing the end of yours to produce up to 150,000 Q5 and electric cars (1,300 million dollars of investment), it would take much longer than anticipated to recover the investment. Or even they would lose if finally Trump applies the 35 % tariff. Obviously, the Volkswagen group and BMW would be european manufacturers who are directly affected by this election promise. But also what would be Fiat and Renault in an indirect way.

Fiat and Renault also would suffer the consequences of indirectly

Nissan Aguascalientes Mexico

Chrysler produces around half a million cars a year in Coahuila and Toluca, and many other engines in Toluca. Chrysler, owned by Fiat, lastraría the results of the Italian group, as Chrysler is directly responsible for 75 % of the benefits of FCA. The situation is even more flagrant in the field of pick-ups: more than 230,000 pick-ups and commercial vehicles RAM come out every year of the factory in Toluca.

Renault does not manufacture in Mexico, but so does Nissan. And Nissan is the first investor auto in Mexico. The manufacturer nippon is a member of the Renault-Nissan Alliance, but that name does not fool you, it is Renault who controls Nissan. Well, Renault, as a reference shareholder of Nissan, had lost this morning 3.15% in the Paris stock exchange.

Daimler-Benz also be affected, although to a lesser extent, as it has plans to manufacture in Mexico as of 2018 in a factory, a joint venture with Nissan (would produce Infiniti models).

A key industry for Mexico

Volkswagen Puebla

The situation for the united States and Mexico is not simple. Toyota, Mazda, Honda and Kia also manufactured in Mexico for export to the united States. And of course, so do Ford and General Motors, which already manufactured in Mexico prior to the Second World War. In 2015, the balance of trade of automobiles between the U.S. and Mexico are tipped in favor of Mexico with a deficit of 52,000 million dollars to the united States. Here, the more you have to lose is Mexico.

The united states is maintained with production levels high (12.1 million units) and it is quite simply the world's second largest producer, even though they are the foreign brands that are more manufactured in your soil, but in this new situation, the local brands are seen between the back and the wall. Not so much because the make cars in Mexico destroyed jobs in the U.S. as told Trump in the campaign -something false, by the way, as demonstrated by Ford - but because a significant part of the population -which then has you buy cars and you voted - you believe him. So much so, that Ford had to announce in the midst of the campaign that the next Ford Bronco was manufactured in the U.S. and not in Mexico.

In Motorpasión | Do you Follow the US being the industrial motor that was yesteryear?

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About Igor Kocic

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