Market Trends of Mexico Automotive EPS Industry
This section covers the major market trends shaping the Mexico Automotive EPS Market according to our research experts:
Passenger Car Segment to Fuel EPS Demand Over Forecast Period
The use of power steering in passenger cars is growing rapidly, owing to its numerous advantages, such as the lack of hoses or fluids in the entire steering system. Some of the major drivers fueling the market growth include the increased adoption of EPS in modern vehicles and the increased penetration of steer-by-wire technology. The demand for power steering is expected to rise as the overall demand for passenger vehicles increases.
Mexico is among the large markets for the automotive EPS market, as on average about 1 Million vehicles are sold in the country. As the number of vehicles sold in the country has increased in 2021 from 2020, this will aid in the increase in the demand for automotive EPS. Additionally, Mexico has progressive plans for the transition, and the country is focusing on increasing the share of electric vehicles to 35% by 2024, 40% by 2035, and 50% by 2050.
The automotive manufacturing industry (including manufacturing of automotive parts) is the largest industry in Mexico, with manufacturing plants of 21 major OEMs, including Audi, Ford, General Motors, Nissan, Toyota, Honda, and Volkswagen. The OEMs can manufacture 42 brands and 500 models with an annual production of more than 3 million cars. A portion of the manufactured vehicles in the country is exported to many countries due to its strong network of free trade agreements (FTAs).
OEM in Mexico is upbringing investments and developments to push the EPS demand in Mexico. In addition, they are steadily shifting towards their offering in EPS to witness an improved sales bar in Mexico. For instance:
- In September 2021, General Motors announced awaited launch of its 2022 Chevrolet Cavalier in Mexico. The new 1.3-liter turbo 3-cylinder engine variant of Cavalier provides a power of 161 hp coupled with 6-speed automatic transmission having electro-power steering (EPS).
With increasing customer awareness of advanced safety systems and technology, people are now concentrating on purchasing cars with improved safety features. Rising passenger safety concerns have compelled automakers to equip their vehicles with driver assistance systems, including steering assistance systems. The use of various steering sensors in electric power steering (EPS) contributes to the driver's added safety.
Furthermore, the adoption of severe fuel efficiency standards, as well as safety measures by governments and international organizations, are viewed as major drivers for the growth and development of improved steering systems (such as EPS), which employ steering sensors extensively. Considering these factors and developments demand for automotive EPS in Mexico is expected to witness high growth rate during the forecast period.
Original Equipment Manufacturer to Gain Momentum During the Forecast Period
A significant increase in the number of accidents has also encouraged end users to adopt better safety systems. Improvements in roadway and motor vehicle designs have steadily reduced injury and death rates in all first-world countries. However, the accident rates are still higher in some developing countries, and governments are focusing on implementing stringent safety norms and supporting the adoption of various subsystems in vehicles that enhance aspects of safety.
Driven by these factors, automobile manufacturers are incorporating several systems into vehicles that enhance safety. Advanced safety and security features are no longer restricted to premium vehicles. Consumers are now more concerned about safety systems and technologies and are therefore interested in opting for vehicles that are equipped with better safety systems.
Considering these scenarios in Mexico, OEMs are shifting their forefront toward offering EPS in their associated vehicle models. This has helped them to gain popularity among the consumer base in recent times. For instance, In July 2022, General Motors has recently confirmed that it has resumed its production of full-size pickups in the August 2022. In addition, This came after but it will keep its midsize SUV plants idled as it grapples with the global shortage of semiconductor chips.
However, country is focusing on ADAS features in cars which has provided significant momentum to electronic power steering as well which has resulted improved driving comfort. The country is witnessing immense growth in the electric vehicles segment from OEM. For instance, to improve the quality of air with zero carbon emissions, minimize noise pollution, and offer a better commuting experience, the Cities Finance Facility (CFF), under the support of Mexico City, Guadalajara, Monterrey, and Hermosillo set up the country's first national system focused on the electrification of their public transport systems.
To promote electric transportation, many companies are investing and setting up plans to cater the increased demand for electric and IC powered vehicles in the country. For instance, in March 2022, Navistar inaugurated its USD 250 Million invested manufacturing plant in Mexico, that will produce diesel and electric powered class 6-8 trucks. Navistar's existing assembly manufacturing base includes truck assembly plants in Springfield, Ohio, and Escobedo, Mexico, as well as a school bus assembly plant in Tulsa, Oklahoma.
Considering these upcoming launched and developments, the demand for EPS is thus being deeply supported by OEM to witness elevated sales bars during the forecast period.
