Stock Groups

Auto sector blasts Mexico’s move to legalize imported used cars -Breaking


© Reuters. Cars are parked at used autos platform Kavak in Mexico City, Mexico, August 25, 2020. Picture taken August 25, 2020. REUTERS/Edgard Garrido/Files

MEXICO CITY (Reuters) – Mexico has published a decree to legalize millions of imported used cars, mainly from the United States, a move that was criticized by the country’s powerful auto sector as allowing “car smuggling.”

The new policy, published in government’s official gazette late on Monday, tasks local authorities with creating a plan to encourage residents of states that border the United States to officially register vehicles that were driven into Mexico, known as so-called chocolate cars.

Baja California state alone is home to more than 500,000 unregistered vehicles, which are commonly used in crimes, said the state security minister, Rosa Rodriguez.

The Mexican Association of Automotive Distributors (AMDA) predicted a drop of more than 30% in new car sales due to the decree and said the move was “a reward for criminal mafia and corrupt bureaucracy.”

The association called on President Andres Manuel Lopez Obrador to adopt policies and dedicate funds to address the root causes of contraband cars.

“It is a mistake to legalize smuggled vehicles … It will have an impact on the economy, as well as create concerning environmental pollution and insecurity that threatens people’s lives,” AMDA Director Guillermo Rosales said on Tuesday in an interview with Mexico’s Radio MVS.

Lopez Obrador said funds collected from the 2,500 peso ($124) fee to legalize an imported used car will be earmarked for regional road works.

($1 = 20.2318 Mexican pesos)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.