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December 2017
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Expanding Borders: Is Mexico an opportunity?

Few things have changed so much in the last 20 years than the lift truck market in Mexico. A once totally closed border for imports is now wide open. A 40 percent duty on imports has become zero duty on any type of truck coming from either the U.S., Japan or the European community. Coming from other countries (which is basically China and Korea) the duty is 15 percent.

A market in which electrics had at the most a 12 percent penetration has become a presence of almost 35 percent today. While three brands were offered in the mid-80s, there are 14 players today (although five of those 14 are responsible for 65 percent of the total sales in the country).

In less than 20 years we have made a jump in total sales volume of less than 2,000 trucks a year to almost 10,000 a year today. Not to mention the used trucks which are being imported, and although no reliable figures are available, the general impression is that for every new truck being imported one used one will come in.

Sales as such are in the majority based on lease, rental or credit with cash transaction being the exception. Cash in Mexico today is 60 days after delivery of the goods, which many times extends to 90 days. This means that the lift truck salesman has to be more versatile in finances rather than in technology.

A variety of changes in the distribution channels has taken place, thus dual and even triple brand dealers are no longer outcasts. There are many more changes between OEMs and dealers,  not to mention the amount of independents who sell as well new as used trucks, importing them out of U.S. dealerships.

There is one local manufacturer of batteries, one large wholesaler/importer with nationwide distribution and many small representatives of a variety of brands which normally are active in specific market niches only.

In regards to tires, there is one local manufacturer left, since the other one was bought out and closed down. In addition to the local manufacturer, there are a half-dozen importers, most of them dedicated to class V tires only, as class IV is very seldom used in Mexico.

Last but not least is the importation of aftermarket parts and accessories. These imports are done by the OEMs, several wholesalers and a couple of dozens of independents who are big enough to import directly. Obviously no figures are on hand but one can make a mathematical estimate:

With a population of between 75 and 100 thousand units, one can estimate that 75 percent of them are in daily activity. If we consider a yearly consumption in parts and accessories to be $600 per truck, we end up conservatively with a total ranging somewhere between $35-40 million.

With China already having a presence in the market, it will probably be only a matter of time until that presence becomes really a figure worthwhile to report.

Rolf Slobotzky is ex-president of the Mexican machinery dealer association and has 60 years experience in the material handling field. For more information, contact Rolf at editorial@mhwmag.com.
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