A drop in light vehicle shipments is proving a drag for Mexico’s export-driven recovery, and it could last to the end of 2004 as car makers shift production lines, Dow Jones Newswires reported.

Excluding declines in light vehicle sector exports, Mexico’s manufacturing shipments abroad would have risen by 5.9% in January compared with a year ago but instead rose by only 2.2%, the report said.

Dow Jones noted that the automotive sector is too important to discount because it now accounts for 16% of Mexico’s manufacturing output and 22% of exports.

“Car exports are definitely an important part of the explanation” for January’s weak trade numbers, Jonathan Heath, an economist with the LatinSource consultancy, told Dow Jones.

The report said Mexican exports have been rising since September, hitting a high of 11.2% growth in December, so January’s 1.2% increase in total exports was disappointing.

“This is not necessarily a case of Mexico not being competitive,” Michael Warren, head of the Latin America Research Group for Toyota North America, told the news agency, adding: “Some automotive companies are re-tuning their lines. It boils down to what new products are coming in, and what old products are coming out.”

Dow Jones said that Ford, for example, stopped producing its Escort model in Mexico last June and axed a production line for the F-series pickup truck in October. All 12,401 Escorts and 23,700 pickups made in Mexico in 2003 were for export and the elimination of both production lines contributed to a 27% drop in Ford’s January exports from the country.

“We can’t be certain, because everything has to do with demand, but we don’t expect an increase in production until the Futura project next year,” Juan Antonio Garcia, director of communications for Ford Mexico, told Dow Jones, which noted that Ford plans to build the Futura sedan, a variation of the Mazda6 line designed by Ford’s Japanese affiliate, Mazda, at its plant in Hermosillo.

The Dow Jones report said new car exports from Mexico reached 77,457 units in January, 17.7% less than in the same month of 2003, according to data from Mexican automobile industry association AMIA.

Around 75% of the cars manufactured in Mexico are shipped abroad, mostly to consumers in the US, where new car sales have been healthy in recent months, the report said.

“What’s happened in the U.S. in the last two years is that consumers have changed preferences. They want more European, Japanese and Korean cars, and the Big Three are losing market share,” Armando Soto, a car specialist with Mexico City consultancy Kaso y Asociados, told Dow Jones.

Ford, DaimlerChrysler and General Motors have large manufacturing facilities in Mexico and, together, the ‘Big Three’ reportedly accounted for 69% of the 1.17 million vehicles Mexico exported last year.

“The US car makers in Mexico are going to go through some changes this year and the next,” Soto added, according to Dow Jones.