President Vicente Fox Signs Legislation Allowing Registration of Some Illegally Imported Motor Vehicles

SourceMex Economic News & Analysis on Mexico, March 21, 2001 | Go to article overview

President Vicente Fox Signs Legislation Allowing Registration of Some Illegally Imported Motor Vehicles


President Vicente Fox has signed into law a congressional initiative that legalizes motor vehicles brought into Mexico without a permit. Many of these cars, known as "autos chocolates," were brought back to Mexico by expatriates who reside in the US at least part of the year.

The new law, passed by Congress last December, only permits registration of models from 1970 through 1993 and excludes sport and luxury automobiles, as well as impounded vehicles. The Secretaria de Economia (SE) has given owners until July 10 to register the cars. The new regulations are expected to benefit some 2.5 million vehicle owners.

The Congress passed the legislation despite stiff opposition from the Mexican motor-vehicle industry, which warned about negative repercussions on the sale of cars and trucks in Mexico (see SourceMex, 2001-01-24).

Fox's support for legalization of these cars is a stark contrast to his predecessor, former President Ernesto Zedillo, who opposed their registration (see SourceMex 1999-11-08, 2000-05-03).

Immediately after Fox signed the legislation, the Asociacion Mexicana de la Industria Automotriz (AMIA) issued a warning that it would result in the loss of value of 14 million legal motor vehicles.

In an interview with the daily newspaper El Universal, AMIA president Cesar Flores Esquivel said the new law in effect legitimizes organized car smuggling. He said organizations and intermediaries have brought more than 3 million vehicles into the country in four years, far more than the Mexican automobile industry was able to sell in the country during the same period.

Still, the industry's protests come at a time of relative prosperity. While domestic and export sales in February declined slightly because of an economic slowdown in the US and Mexico, the market remains fairly stable. Mexicans bought more than 56,000 cars in February, an increase of 24% from the same month in 2001, the AMIA said.

"There is stability in the Mexican economy and a clear signal that Mexicans are still willing to purchase vehicles," Flores said after his organization released the February data.

Return of auto-registration program delayed

While the disputes over autos chocolates may be over, at least for the near term, the Fox administration is having difficulties resolving another problem involving registration of motor vehicles.

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