Mexico's auto sector faces limited growth amid US trade uncertainty and weak consumption, Scotiabank warns

Published: 2026-04-24 12:15:06 ET BNS.TO

Published on 04/24/2026 at 12:15 pm EDT

Mexico's automotive industry will see constrained performance through the remainder of 2026, caught between external risks from the uncertain trade relationship with the United States and domestic factors including weakening private consumption and limited formal employment growth, Scotiabank warned in its first quarter automotive sector report, Xinhua reported.

The bank said the sector had shown a slight improvement in the first three months of the year compared with the previous period, but cautioned that recent moderation in annual rates reflected base effects from a particularly weak start to 2025 rather than a genuine strengthening of activity. The heavy vehicle segment showed no clear signs of structural recovery.

Light vehicle sales, production and exports recorded moderate advances, suggesting some resilience, but growth remained limited in absolute terms. The bank flagged risks from a slowdown in private consumption, limited formal employment dynamism and recent adjustments in market structure, particularly regarding imports and market share by country of origin.

Persistent uncertainty, stalled investment and risks associated with the USMCA review process would continue to limit a more dynamic recovery in the short and medium term, Scotiabank said. Mexico sends the large majority of its automotive output to the United States.