Mexico Inflation Cools While Auto Exports and Vehicle Production Continue to Fall

Mexico Inflation Rate Slows to Over 6-Year Low

Mexico’s annual inflation rate eased to 3.12% in July from 3.37% in June, marking its lowest level since May 2020 and matching market expectations. The reading brought inflation closer to Banxico’s 3% target, within a tolerance range of ±1 percentage point. There was a broad-based slowdown in prices, including for food and non-alcoholic beverages (0.78% vs 1.66% in June), housing and utilities (3.23% vs 3.34%), and transportation (3.21% vs 3.36%). Energy inflation also edged down to 1.16% from 1.39%, while services inflation eased to 4.36% from 4.49%, although it remained elevated. Slower price increases were also recorded for alcoholic beverages and tobacco (7.34% vs 7.66%), insurance and financial services (6.41% vs 6.74%), restaurants and hotels (6.37% vs 6.63%), education services (5.91% vs 5.93%), healthcare (4.80% vs 4.84%), and recreation, sport and culture (3.63% vs 3.73%). Annual core inflation rate fell to 3.95%, the lowest since April 2025. Monthly, the CPI was almost flat.

Mexico Auto Exports Fall Again in July

Mexico’s car exports fell 9.7% year-on-year to 261,534 units in July 2026, following a 9.2% decline in June. The decline reflected continued uncertainty in the auto sector as changing US trade policies clouded manufacturers’ export plans. US President Trump in his second term imposed a series of tariffs on multiple countries, including Mexico. The Trump administration also decided not to renew the USMCA, the agreement will remain in force for another decade unless a member withdraws, but with annual reviews that could lead to significant changes. The US and Mexico also continue bilateral trade negotiations. Export volumes declined sharply for Mercedes (-97.7%), Nissan (-75.6%), Mazda (-35.4%), and Honda (-21.3%).

Mexico Car Output Falls for 2nd Month

Mexico’s car production fell 2.2% year-on-year to 302,673 units in July 2026, following a 1.9% decline in June. The result reflected continued uncertainty in the auto sector as changing US trade policies clouded manufacturers’ production plans. US President Trump in his second term imposed a series of tariffs on multiple countries, including Mexico. While the Trump administration decided not to renew the USMCA, the agreement will remain in force for another decade unless a member withdraws, with annual reviews that could lead to significant changes. The US and Mexico also continue bilateral trade negotiations. Output declined sharply at Mercedes (-98%), Honda (-26%), Stellantis (-20.3%), and Nissan (-18.9%).

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