Truck Sales Plummet After False Start
Heavy truck sales in Mexico declined 40.5% year-on-year (y-o-y) in January 2014, to 671 units. Manufacturing and construction activity in January came in below expectations. BMI believes that this, combined with the Q413 surge in heavy truck sales as sentiment in the market improved, has created a surplus in the segment. We expect to see a correction in the coming months and sales are likely to remain poor. Accordingly, we are revising down our 2014 sales forecast to a decline of 10%.
One of the main reasons for the drop-off in January truck sales is the strong growth seen in the latter months of 2013; purchasing decisions were brought forward, prompting strong sales increases in Q413. BMI expected to see a 'resurgence in the segment in the final months' of 2013, on the back of low base effects and improving manufacturing and construction figures following a period of weakness earlier in the year. This played out, with December registering a 30.5% y-o-y increase ( see 'Positive Momentum To Buoy 2014 Heavy Truck Sales', January 22).
We had expected this positive momentum to continue into 2014 as growth in the construction sector and industrial production on the back of stronger investment and strengthening US demand for Mexican manufactured goods boosted the segment.
|Far Below Peak|
|Mexico Heavy Truck Sales Data And Forecasts, Units|