Test the Latin American Market at the 2010 PAACE Automechanika

SEMA News - April 2010

By Dan Frio

With a Growing Middle Class and Avid Automotive Enthusiasm, Mexico and Its Neighbors Offer a Great International Expansion Opportunity for SEMA Members 

  SEMA NEWS-APRIL 2010-INTERNATIONAL-MEXICO 
 

Mexico City will host the 12th edition of the PAACE Automechanika, where buyers from throughout Latin America will converge.  

   
As one of the fastest-growing market sectors in Mexico, the automotive industry presents a timely opportunity for SEMA members seeking to establish a foothold in this expanding consumer base. The annual SEMA Show is one of the best places for specialty-equipment manufacturers to meet with buyers from Mexico, with more than 1,157 attending the Show in 2009. But don’t wait until November to start making contacts. The 12th edition of the PAACE Automechanika, July 14–16 in Mexico City, draws automotive professionals and buyers from throughout Latin America and presents a great opportunity to test the market.

“Mexico is a very important market for us and offers growing potential for our products,” says Joseph Lombardi, director of international sales for transmission and driveline supplier Sonnax. Last year was the company’s fourth time exhibiting at PAACE Mexico City.

“It’s a great show, an entry point into building and growing already existing or new sales in the region. In spite of the economic downturn that affected Mexico, last year’s show was well-attended, and our booth was quite busy all three days.”

This year’s show will feature new additions to the program, as well as some popular favorites. West Coast Customs Mexico will return to the show with its popular workshop series, customizing several vehicles over the course of the show days, and bringing more exposure to Mexico’s specialty-equipment market.

One new feature of the 2010 event is a New Products Showcase area, offering exhibitors the opportunity to display products released into the market within the last year, along with an 8.5- x 11-inch document listing technical information for installers.

  SEMA NEWS-APRIL 2010-INTERNATIONAL-MEXICO 
 

In addition to top show vehicles from local clubs and domestic manufacturers, this year’s PAACE Automechanika show floor will feature expanded product categories, including collision and repair.   

   
Another new development involves the Automotive Service Association (ASA), the key association for U.S. automotive service and repair professionals. The ASA will host a series of complimentary educational sessions that will feature nine seminars covering collision repair, business management and mechanical topics.

Service and repair professionals attending PAACE Automechanika Mexico 2010 will benefit from an enhanced educational program and expanded product categories on the show floor, with support from the association. In addition to the enhanced seminar program, PAACE Automechanika Mexico expects to expand the presence of collision repair manufacturers on the show floor, showcasing their products to the Mexican market. And, as in past shows, exhibitors are offered the opportunity to host seminars at the show free of charge.

PAACE Automechanika is also certified by the U.S. Department of Commerce, which is working to bring buyer delegations from Central American countries and provide matchmaking assistance to U.S. exhibitors.

“PAACE Automechanika is an excellent venue for U.S. companies to connect not only with Mexican buyers, but to take advantage of the growing number of buyers from surrounding countries and throughout Latin America,” says Linda Spencer, SEMA director of international relations. The Mexican automotive market is one of the fastest-growing markets in the country. In 2008, SEMA reported that there were about 10 million passenger vehicles on the road—about one to every 13.3 people. (For comparison, there is one vehicle per 2.2 people in the United States) Many among the growing middle class in Mexico are seeking to purchase their first vehicles.

  SEMA NEWS-APRIL 2010-INTERNATIONAL-MEXICO 
 

Retail sales of specialty equipment in Mexico were estimated at around $1.5 billion.  

   
The country has not been immune to the global economic slump, however. Mexico’s automotive trade association, asociación mexicana de la industria automotriz a.c. (AMIA), noted that sales of light vehicles in 2009 were down 26% from the year prior. Still, Mexican car buyers bought 2 million vehicles in 2007 alone, split evenly among new- and used-vehicle purchases, which capped a trend of four consecutive years of more than 1 million car sales.

SEMA reported that about 60% of new cars sold in Mexico are U.S. brands, although they are often the European versions. The best-selling Chevrolet Chevy, for example, is based on the European Opel Corsa.

The most popular cars to customize, according to the 2008 report, include the Chevy, Ford Focus and Ford Mustang. Ford trucks are similarly popular, with the Ranger among the most modified trucks, and the Explorer Eco Sport is one of the top tricked-out SUVs. Other popular trucks targeted for customization include the Dodge Ram, Toyota Tundra and various Nissans. The Jeep Cherokee is another popular SUV.

The U.S. Embassy in Mexico estimates retail sales in the specialty-equipment industry at about $1.1 billion, although distributors surveyed by SEMA placed the number slightly higher, at $1.5 billion. The specialty-equipment/accessories segment represents approximately 11% of the total aftermarket segment, according to SEMA research.

What are Mexican enthusiasts buying? According to data complied by the U.S. Embassy in Mexico, the most popular products are specialty wheels and tires, audio and interior accessories, pickup bed covers, toolboxes, security systems and car-care products. And styling products just edged performance goods as most popular by a slim margin of 52% to 49%, according to SEMA’s 2008 report.

American-made products enjoy the most esteemed reputation for quality among Mexican buyers, followed by European brands and domestic offerings. 

For more information on PAACE, contact Linda Spencer.