Mexico Motorcycles Market is again on fire. After the first nine months 2024, sales have been near 1 million projecting the year at a new record. Italika consolidates the leadership although growing number of competitors.
Motorcycles Market Trend
Actually, Mexico is among the World’s 15 largest economies and is the second largest economy in Latin America, while keeping the year after year growth, the motorcycles industry is now surged in eight place globally, and is the largest in Latin America, ahead of Brazil.
In 2024, Mexico is expected to achieve a growth rate higher than its 30-year average, despite the challenges posed by higher interest rates on investment and consumption at home, and lower growth in the US, its major trading partner.
Headwinds caused by higher interest rates and US issues should be offset by a significant drop in inflation from 4.7% at the end of 2023 to 4% by late 2024, driven by a slowdown in prices of energy, produce and general goods. This represents a huge drop from the 8.7% peak recorded in September 2022.
However, inflation in services has remained stubbornly high at 5.5% over the past year on the back of strong domestic demand and generous wage rises. As the economy cools, this rate should begin to subside.
As far as the motorcycles industry, the long term positive pathway continues although clouds over the economic environment, mainly pushed up by increased competition, with several new manufacturers landed in the country in the most recent years, aiming to attack the Italika leadership (without success, so far).
In the first nine months of the 2024, total 2-wheelers sold in the country have been near 1 million projecting the year at a new record.
The electric segment is growing (+34.6%) while it is still almost marginal.
Looking at the competitive arena, Italika is the solid leader, and sales started very well (+7.6%).
In second place the other local OEM, Vento (-14.6%) followed by Honda (+1.1%) and Bajaj Auto (+5.4%).
Mexican Market Heritage and Overview
In the last decade, the motorcycles industry pumped up in Mexico from very low level to become one of the largest in the World and one of the few over 1 million annual sales.
The market growth was correlated with the outstanding development of the local manufacturers, led by Italika, a giant with over three quarter of million annual production, which dominate the market with over 70% market share.
The uniqueness of this market is represented by the current sales mix, in which the local brand represent over 85% of sales, with Japanese brands not dominating as in the rest of the World and with premium brands marginal with less than 2% of market share.
However, Italika is not the only local producer, as other brands on top of the local competition are made in Mexico, like Caravela and the second best seller, Vento, which is a company based in US, but selling in Latin America.
The top not Mexican manufacturer is Honda, which produce vehicles in he Guadalajara plant, opened in 1985, with main production focused on GL150, CGL125, XR150L, DIO, CB190R models and with a 100.000/year capacity.
The last to have discovered the potential of this market have been the Indian manufacturers and with the landing of Hero (in partnership with Italika), all the Fab4 Indian companies (Bajaj Auto, TVS Motor, Royal Enfield and Hero) will fight in the market.
Bajaj opened a 50.000/year units plant in 2020. Together with the market leader, even the Indian Bajaj Auto contributed to support the market, rapidly expanding the presence in the market, thanks to the new local plant.
As far as transition to electric vehicles, the country is still at ground zero. The CO2 emissions are at stage 4, since only the 2020 and electric market is near zero.
