Mexico Auto Output Rises In September

Mexican Auto Industry Association said the country increased vehicle production 9 percent from August to September -- the largest monthly amount this year.

MEXICO CITY (AP) -- The Mexican auto industry is showing signs of a possible rebound from recession, with an increase in production of 9 percent from August to September reported Monday.

The Mexican Auto Industry Association said the country manufactured 146,295 vehicles in September -- the largest monthly amount this year and an increase from 134,501 in August. It was the third consecutive month with a rise in output.

But the numbers still showed a notable falloff from a year ago. Production was down 23 percent from the 189,345 vehicles produced in September 2008.

The association cautioned that the recent uptick in demand might not be enough to pull the industry out of its slump.

"We need to wait until next month to see if we have a real recuperation," association President Eduardo Solis told The Associated Press. "It must be viewed with caution."

Exports to the United States -- the biggest market for Mexican-made cars -- were down 35 percent in September compared to the same month last year, while domestic car sales fell 23 percent.

"In the case of Mexico, the crisis in the sector has been so profound that government support, including fiscal incentives, will be critical and urgent," Solis said.

Earlier this year, President Felipe Calderon pledged 2 billion pesos ($147 million) to help Mexico's car makers and other troubled companies avoid big layoffs.

Solis said the government also needs to take steps to spur auto sales, calling for tax incentives for car buyers.

Mexican dealers sell eight cars for every 1,000 people in the country, compared to 14 cars for every 1,000 residents in some South American countries, he said. He said if Mexico could achieve such levels, dealers would sell between 1.7 million and 2 million vehicles annually.

So far, dealers have sold 530,163 vehicles in Mexico this year. Last year, they sold 1.1 million, according to the Mexican Association of Auto Dealers.

Mexico is the world's No. 10 car maker. The industry has grown over the past decade to become the country's largest single manufacturing sector.

In another report released Monday, Mexico's National Statistics Institute said the country's industrial production in August was down 7.3 percent from the same month in 2008.

The central bank has said Mexico appears to be pulling out of the recession.

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