Mexico limits tariffs break to established local carmakers

MEXICO CITY, Oct 16 (Reuters) – Mexico said on Friday that a new five-year tariff break for imported car parts will apply only to automakers that already have production facilities in the country.

The clarification comes several days after industry analysts raised questions about the decree’s potential to open the door to Chinese brands or other newcomer car companies.

• A decree published Tuesday cut an import tariff to zero from 10% for certain assembly parts, including semi-knocked-down (SKD) and completely knocked-down (CKD) kits

• The move prompted industry analysts quoted in local media to suggest Chinese automakers such as GAC and JAC could be poised to benefit

• The economy ministry on Friday clarified that the measure applies only to companies with “productive installations” in Mexico and that meet other specific criteria

• The ministry said 11 carmakers were eligible under the scheme, without naming them

• Industry data reviewed by Reuters points to those firms as potentially being Audi, BMW, Ford, General Motors, Honda, Kia, Mazda, Nissan, Stellantis, Toyota and Volkswagen

• Mexican sales of Chinese-brand vehicles jumped nearly 30% in the first six months of the year despite steep ‌tariffs intended to slow the rise of Asian imports

(Reporting by Kylie Madry, Editing by Daina Beth Solomon)

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