Mexico’s Automobile Production Fell 39.4 Percent In May

MEXICO CITY (Reuters) – Mexico’s automobile production fell 39.4 percent in May compared to the same month a year earlier, stung by slumping U.S. demand and the swine flu scare, a Mexican industry group said Monday.

The Mexican Automotive Industry Association, or AMIA, said vehicle exports dropped 44.3 percent to 83,910 units in the month compared to May 2008.

“We’re looking at figures that we haven’t seen, depending on which month you choose, in the past 12 or 13 years,” AMIA head Eduardo Solis told reporters.

Around 70 percent of cars produced in Mexico go to the U.S. market, which is suffering its worst downturn in almost 30 years, and the Mexican economy has been hit hard by a collapse in auto production.

The industry’s problems were compounded by the recent H1N1 flu epidemic, which led the government to temporarily shut down parts of the economy in late April and early May. The outbreak also kept potential shoppers in Mexico indoors.
“The situation is dramatically difficult,” Solis said. “That’s a reflection of consumer uncertainty and undoubtedly the effect of the health crisis.”

Mexico, the world’s No. 10 car maker, assembled 108,162 automobiles in May and exported 83,910, AMIA said.
General Motors Corp, Nissan Motor Co, Volkswagen AG and Ford Motor Co dominate Mexico’s auto industry, which has been cutting jobs and idling plants.

Chrysler suspended operations at its plants in Mexico in May after filing for bankruptcy.
General Motors, which filed for bankruptcy protection last week, is expected to keep churning out cars and trucks in Mexico, where it enjoys relatively low costs.
Mexico’s economy is seen shrinking about 5.8 percent this year.