The Mexican automotive market is facing a period of profound transformation, marked by the impact of both internal and external tariff policies, changes in consumption patterns, and a reconfiguration of production and sales strategies.
Tariffs: a new regulatory ingredient
Starting in January 2026, Mexico will implement new tariffs of up to 35% on vehicles imported from countries with which it does not have free trade agreements, mainly China, India, South Korea, Thailand, and Indonesia. This measure is part of a broader policy to protect domestic industry and strengthen local production, although it is already causing concern among producers and distributors due to its possible effects on prices and sales volumes.
The Mexican government emphasizes that these tariffs seek to encourage local production and preserve jobs, in addition to generating additional tax revenues estimated at $3.76 billion by 2026.
These decisions come amid global trade tensions, particularly the tariff measures established by the United States, which since 2025 has imposed 25% tariffs on automobiles and components that do not comply with the rules of origin of the United States-Mexico-Canada Agreement (USMCA).
Organizations such as Moody’s have warned that unilateral tariffs could reduce the competitiveness of Mexican exports, decrease production, and put jobs at risk in a sector that accounts for a significant percentage of the country’s manufacturing GDP.
In addition, industry experts point out that, in response to these measures, some plants in Mexico and Canada have adjusted production or suspended activities, affecting highly integrated supply chains.
Impact on prices and demand
Various economic analyses, including Fitch Ratings, project that tariffs could have a direct effect on the increase in prices of new vehicles in Mexico, with an additional impact on demand and auto credit.
This phenomenon comes on top of the normalization of the market following the COVID-19 pandemic, which had already generated cost pressures and changes in consumer behavior, with significant variations in volume growth and product supply.
Where are consumer preferences heading?
Despite tariff challenges, the alternative vehicle segment (electric and hybrid) has shown growth in Mexico. Data from industry associations reveal that hybrid and electric vehicle production grew by 179% in the first quarter of 2025, and sales also increased significantly, representing more than 9% of the total market.
Customer satisfaction studies, such as J.D. Power’s 2025 Mexico Sales Satisfaction Index, indicate that buyers of hybrid and electric vehicles report higher levels of satisfaction compared to owners of traditional cars, which is a positive sign for the consolidation of these segments in the medium and long term.
However, industry experts have pointed out that, due to charging infrastructure limitations and risk perceptions, Mexican consumers still show a preference for hybrid vehicles over fully electric ones, a common trend in developing markets. This rational adoption pattern may influence manufacturers’ product strategy.
Outlook for 2026
The combination of tariffs, new international trade dynamics, and changes in consumer behavior creates a landscape that blends caution and opportunity.
The main challenges include:
- Cost and price pressures on imported vehicles.
- Possible slowdown in domestic demand and in specific segments.
- Continuous reconfiguration of supply chains in the face of regulatory uncertainties.
At the same time, there are positive signs such as:
- Sustained growth of alternative technologies (hybrid and electric).
- Greater focus on after-sales service and value differentiation.
- Strategic positioning of Mexico as a production hub in North America, provided that a balance is maintained between protectionist policies and international competitiveness.
The Mexican automotive market is undergoing a period of profound readjustment, influenced by regulatory, economic, and technological factors. Tariffs represent a challenge, yes, but they also encourage the industry to redefine strategies, strengthen its resilience, and explore segments with higher added value.
The key for the coming years will be how companies and governments balance protection, competitiveness, and adaptability in an increasingly complex global environment.