Mexico City. The treaty between Mexico, the United States and Canada (T-MEC) will provide a seven-year period to adjust the rules of origin for the car parts used in the manufacture of heavy goods vehicles.
This is a longer period than the transition to the three-year origin rules for passenger and lorries.
For parts used in heavy trucks, the origin rules will be divided into two categories. The first corresponds to the major automotive industry, with a regional content value (VCR) of 70% and the other covers the complementary parts with a regional content value of 60%.
The main car parts include engines, pistons, engine parts, fuel pumps, fans, air pumps, air conditioners, drive axles, gearboxes, steering wheels, chassis, bodies, fenders, seat belts, brakes, differential steering wheels, wheels, shock absorbers, radiators, silencers, exhaust pipes, couplings , airbags and seating.
In 2017, Mexico produced auto parts worth $ 92,000 million, while in the same segment, exports amounted to $ 73,500 million and imports amounted to $ 49.1 million.
From 2019, heavy truck manufacturers will have to buy steel and aluminum in the region to reach 70% North American content and follow retroactive certification of the automotive industry, as stated in the new deal.
Some of the additional vehicle parts are hydraulic hydraulic pumps, electronic braking systems, including ABS and ESC systems, clutch and shaft couplings, lithium ion batteries and ignition equipment.
The video recorder is a percentage indicating to what extent a product has been produced in the producer's local region. The origin of the components or materials of the goods, the location of the production of this and other factors affects the percentage.
Generally, the rules of origin refer to the criteria agreed upon in a free trade agreement to define when deemed good origin (due to its regional content) in order to enjoy tariff preferences.
The largest world manufacturers of lorries that have manufacturing facilities, spare parts and maintenance workshops in Mexico are: Cummins, Daimler Commercial Vehicles, Detroit Diesel Allison from Mexico, Dina from Mexico, Freightliner Mexico, Photos Mexico, Isuzu from Mexico, Kenworth Mexicana, Mack Trucks Inc, Man Truck and Bus, Volkswagen Mexico, Scania de México and Volvo Mexico.
Finally, passenger bus manufacturers have the longest manufacturing tradition in Mexico, with several production facilities across the country.
Rules for trucks. From 2019, heavy truck manufacturers (Daimler, Hino, Kenworth, Volvo, Man, among others) have to buy steel and aluminum purchases in the region, achieve 70% North American content and follow retroactive certificate of vehicle origin regulations, as provided for in Treaty between Mexico, the United States and Canada (T-MEC).
Miguel Elizalde, chairman of the National Association of Producers of Buses, Trucks and Tractor Trucks (ANPACT), said Mexico, the United States and Canada should carry out the certification of the regional value of steel and aluminum with retroactive effect in order to start buying the efforts in the region.
The 70% steel and aluminum purchase to be manufactured by heavy truck manufacturers in the three countries will come into operation one year before the T-MEC enters into force, so the heavy vehicle sector and the secretariat of the economy should include the definition of the duty fractions of the metals before signing.
In an interview, ANPACT leaders explained that Mexico is no big problem because 98% of its truck production is exported to North America, but the United States has to reconfigure its purchases.
In the next few days, the economy will define the steel and aluminum tariffs (deliveries) used by assembly companies without including auto parts to comply with the rules of origin from January 1, 2019 – in the case of T-MEC, come into force in 2020. " In two months, the plants must buy steel and aluminum from the region because it is a retroactive year to begin the following year (with the treaty). "