The demand from the industrial sector of Mexico will be affected when state and federal authorities start the implementation of progressive measures to control the spread of the novel coronavirus, says an article.

The industrial sector is the second-biggest energy consumer in Mexico. It represents 32% of the total energy consumption of the country in 2018, based on the latest date from the energy ministry SENER.

The Automotive Manufacturing Sector

The Automotive Manufacturing Sector is part of the sectors that are already struggling with the disruptions in the supply chain caused by the COVID-19 pandemic. Additionally, the sector is being troubled with the falling demand for their products by many consumers.

Recently, almost all automotive manufacturers with operations in Mexico had announced the suspension of production.

The US-based General Motors, the top automaker in Mexico, had started announcing on March 20 the suspension of all its plants operating in North America. The company did not release any notice on how long the suspension of operations will last.

Nissan, the second-biggest automaker in Mexico, had also announced a suspension of operations in Mexico from March 25 to April 14.

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Other automaker firms doing operations in Mexico had also announced similar measures. Many are already announcing that their initial restart dates will be in April.

In press statements, some companies reveal that they are yet to determine their restart dates. According to these companies, the decision when the restart date of its operations will depend on evolving factors such as public health conditions, travel restrictions, and quarantine requirements.

The auto manufacturing sector of Mexico had used up a total of 18PJ of energy in 2018.

What Happens if the Auto Assembly and Auto Part Plants Remain Non-operational?

If the auto assembly and auto part plants in Mexico remain non-operational for an extended period due to the impact the COVID-19 to public health and other impacts, there is a possibility of change in electricity demand and dispatch requirements for certain nodes.

Extended suspensions can also result in economic losses within Mexican territory, says Mexico's association of auto distributors called AMDA. During a press release on March 23, the AMDA said that it had sent a letter to the president of Mexico Andres Manuel Lopez Obrador. The letter contains a list of multiple relief measures for the benefit of the troubled industry among others that are also encountering the negative consequences of the COVID-19 crisis.

Energy Demand from the Auto Manufacturing Sector

The energy demand from the auto manufacturing sector is projected to decrease this year. The industry had been facing a decreasing demand from the United States and Canada. Mexico exported approximately 86% of production in 2018. US new-automobile sale is forecasted to continue its declining trend from the record high they had set in the earlier parts of the decade. Also, multiple risks are emerging that may speed-up the decline in this sector of the country.