Friday, April 3, 2015

Taken for a ride in Mexico

While cruising around on the internet a few days ago Stew found a report on the Fox News site—a news source we generally avoid except for laughs—that cars sold in Mexico don't have to meet many basic safety requirements imposed in the U.S., Canada or Europe, such as air bags or anti-lock brakes. In fact, the dirt-cheap Nissan Tsuru which is ubiquitous in Mexico and used largely for taxicabs scored zero out of five stars on safety tests. See:  Unsafe cars in Mexico

That reminded us of our friend Doug who ten years ago bought a new VW Pointer here that came with neither seat belts nor airbags. That's about as reassuring as the Russian-made Mosvka sedan Stew and I rode in Cuba. Barreling about 80 mph down Cuba's only expressway, with palm trees whooshing by and an angry driver hell bent to get back to his wife in Havana before sunset, all I could think was that if a tire blew we'd all end up in Key West. 

When we bought our Ford Escape a year ago we found another peculiarity of the Mexican new car market: there is no price competition—none. Sticker price is what it is and there's no bargaining or haggling no matter which make or where you buy it. In fact, there are no rebates or any other enticements to lure you to a different dealer or brand.

If you're thinking of running over to Texas to buy a new car at a better price, and whistle happily while you cross the border, forget that too. Mexican import laws make it impossible for individuals to import cars less than ten years old.

I am not a lawyer, but in the U.S. such pricing policies would be considered, dunno, a cartel? anti-competitive practices? restraint of trade? collusion? a total screw job for José the Mexican consumer? Certainly they would be challenged by the government which would also enforce tougher safety regulations to protect its citizenry.

None of the above. In Mexico it's called "reality" and Mexican drivers pay for that cozy arrangement enjoyed by car manufacturers and dealers.

Worse, new cars—and particularly used cars—are more expensive here than say, in Texas where the supply of vehicles of all types is virtually unlimited. So according to the Fox News report, some new cars with all safety features can costs less, or at least the same, in the U.S. as one without them in Mexico. 

Stew and I didn't compare Ford Escape prices in Mexico and the U.S.—why give yourself an ulcer if there is nothing you can do about it?—but I'm sure that between the sixteen percent value-added tax on new vehicles plus the lack of price competition in Mexico we could have gotten the same car in Texas for a couple of thousand dollars less.

By the way, Stew made sure that our Escape, which was assembled in Louisville, Ky., came with six airbags, anti-lock brakes and all that despite the ominous sticker on the windshield: "For Sale in Mexico Only." I wonder what's missing compared to a similar Escape sold in the U.S.

Options are another interesting factor in car buying. For some reason, probably Late Onset Midlife Crisis, (LOMC) Stew and I recently went foraging for an Audi SUV with a manual transmission, ideally with a turbo-diesel engine. Manual gearboxes are still quite common in Mexico.

No go: Audis with a manual only come in the smallest, cheapest model. The same for BMWs and Mercedes. VWs seemed to have the largest number of models with a stick, but again only in the cheapest models.

(Stew now is talking "revenge" by buying a Mustang with a 500 cu. in. engine, which is sold in Mexico with a manual transmission. Dream on buddy.)

When I asked the saleswoman at the Audi dealer in Querétaro why there were so few options compared to models in Europe, she rolled up her eyes and said, "Sir, you're in the Third World, not in Europe." Give her an A for candor.

Give an A for candor too to the guy in the Mexican government in charge of the department of auto safety standards. He admitted that Mexico didn't impose the same basic safety requirements as Europe or the U.S. because car manufacturing is a huge sector of the Mexican economy—$30 billion to be exact, cranking out three million cars a year—and it would not be prudent to pester that golden-egg layer with government safety regulations.

"It's a complicated subject because of the amount of money car makers bring to this country," he explained.

And how do we like our Ford Escape? We're pretty happy with it, no problemas during the first year.

My only unfulfilled wish is a turbo charger and a manual transmission to help out the Escape's somewhat anemic four-cylinder engine. Neither was available. This year Ford is offering a turbo in Mexico but caramba, no manual transmission in the horizon.


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