Mexican vehicle exports have fallen by 16% over the course of April for a number reasons. One main fault behind the drop is that Americans are buying more light trucks which are not normally produced in Mexico. The Mexican Automotive Industry Association released a report today that says that car exports have fallen from 233,515 in April 2015 to 197,020 in April 2016 because of the industry trend. In the first fourth months of 2016, Mexican auto exports have fallen from 922,029 to 854,118 vehicles as part of the downward trend in Mexican exports. Exports to the United States represent three quarters of all Mexican production, so the downturn has spelled negative consequences for the Mexican economy because the auto industry plays a large part in the economy as a whole. Because light truck consumption in the United States has increased 11 percent in light of a 5.5 percent drop in demand for automotives over the course of the last four months in 2016, the Mexican auto industry has suffered tremendously from the decrease in exports to the United States. This recent development highlights some of the topics that we covered with Thomas Klier last week about global auto production and the intersection between Mexican production and American consumption. It’s important to keep in mind that changes in American tastes and preferences have large effects on the auto industry in other countries who rely on American exports for much of their market share. I find this recent trend in light truck demand and the implications for the Mexican economy to be interesting and relevant.