Volkswagen Truck & Bus (VWTB) launched its financial company in Mexico, TRATON Financial Services , with the goal of offering financing plans aligned with the needs of its VWTB and MAN brands .

Starting April 1, all new contracts in the dealer network will be channeled exclusively through this new entity.

During the presentation, the spokespersons emphasized that this initiative is part of the TRATON Group’s strategy to offer a comprehensive solution that combines products, financing, insurance, and after-sales services .

The company framed this launch within its institutional narrative, repeatedly using the term “spectacular” as a motto to define the logistical, technological and financing challenges facing the sector.

TRATON Financial Services will operate with a modern, technological structure. “It’s a very modern company. I believe it’s one of the few in the market, if not the only one, that truly has a financial executive, 100% digital files and processes in this segment. From the credit application to the contract, there could be no paperwork,” explained Alejandro Arredondo, Brand Director of VWTB & MAN, Traton Financial Services Mexico.

Arredondo noted that the focus will be on facilitating access to financing for both small businesses and large fleets .

Initial products include simple credit, financial leasing, pure leasing, and a fleet management solution. Limited insurance will also be offered on financed vehicles and their accessories.

Mexico’s Relevance to Traton Financial Services

The financial institution has operations in 67 countries and more than two thousand employees worldwide. Mexico represents nearly 10% of its workforce and is the fourth largest company in the company’s portfolio. The financial institution’s structure has already been registered as a Multiple Purpose Financial Company (Sofom) with Mexican authorities.

Johan Haeggman, CEO of TRATON Financial Services, explained that financial integration is key to meeting carriers’ demand for comprehensive solutions. He added that the firm’s experience in other markets will allow it to adapt similar models to local conditions.

Volkswagen Truck & Bus aims to generate approximately 40% of its sales in the Mexican market through its finance company in the coming years. By 2024, the brand will sell more than 3,000 units , according to Rafael Santos Magalhães, Director of Operations for Volkswagen Truck & Bus Mexico.

Santos Magalhães said that no specific target for 2025 has yet been set , although he did mention that the distributor network is already integrated into the new scheme.

The portfolio also includes wholesale financing for distributors and after-sales support . No details were shared regarding the initial portfolio amount, but it was confirmed that the operation is launching with solid financial backing and validated regulatory processes in Mexico.

Although a dedicated electric vehicle division hasn’t been announced , Arredondo stated that the team has prior experience financing them. He noted that the placement of these types of vehicles will depend on infrastructure development and market conditions.

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Within the framework of a scenario where there is a slowdown in production and exports due to the drop in demand from the main market, the United States, the domestic market maintains a positive pace, although there are “screws to tighten.”

In this context, the prospects for the industry that participates in the national market have challenges ahead, which must be addressed head-on, expressed specialists within the framework of the AMDA 2024 Forum , organized by the Mexican Association of Automotive Distributors (AMDA) .

Regarding the outlook for the industry and global competition, Many Katakis, senior analyst at  S&P Global Mobility, reiterated that Mexico is a crucial source of light and heavy vehicle production, surpassing countries such as Japan and Germany in volume.

However, he warned about growing competition from China, especially in the export from this territory of trucks and buses with alternative fuels such as natural gas and electricity.

Katakis also noted that Chinese truck imports have increased significantly, with 25% of mid-size commercial vehicles being alternative fuels. This growth in Chinese imports poses a challenge for Mexico, which is heavily dependent on the US market.

He noted that big players such as PACCAR ,  TRATON and  Daimler Truck will continue to dominate the market in 2024.

Likewise, Jorge Arturo Gordillo Arias, director of Economic and Stock Market Analysis at  CI Banco , highlighted the importance of nearshoring for attracting investments in Mexico , estimating that it should exceed 40 billion dollars.

In addition, Gordillo mentioned that production and inputs in the automotive sector are performing well, but emphasized the need to improve conditions to attract more investment and compete globally.

In the perspective of Guillermo Rosales, executive president of AMDA, despite the adverse movements in production and exports, the domestic market showed a notable recovery, with the marketing of 22,052 units of heavy commercial vehicles, which represents a increase of 10.1% compared to the previous year and 24% more than in May 2019.

“By the end of 2024, sales could exceed 56,000 units, very close to 57,000 units, establishing a new sales record in Mexico, surpassing the 2007 record,” Rosales said.

At the end of last May, the production of heavy units in Mexico decreased 15% compared to the same cycle in 2023, totaling 79,900 units produced. Meanwhile, exports had a decrease of 15.8% to reach 63,404 units sent abroad in the same cycle.

A point to highlight is Mexico’s position as a world leader in the production of heavy vehicles, emphasized Virginia Olalde, director of Foreign Trade and Economic Studies of the National Association of Bus, Truck and Tractor Producers (ANPACT) . In 2023, the industry broke a record with the production of 222,813 units, of which 177,541 were for export.

“Mexico remains the world’s leading exporter of tractor-trailers and the fourth largest exporter of heavy vehicles. This industry generates employment and social development in more than 10 states of the republic, with 12 manufacturing plants in operation,” Olalde clarified.

However, he stressed the need to renew the vehicle fleet and improve environmental regulations to continue being competitive globally.

The AMDA 2024 forum made it clear that , despite the current challenges , the projections for the automotive sector in Mexico are positive. The combination of a robust domestic market, leadership in the production of heavy vehicles and the commitment to the renewal and improvement of environmental regulations, positions Mexico to continue being a key player in the global automotive industry.

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