MEXICO CITY - Mexico's auto industry will be watching closely as the country's movement toward democracy gets a big test next week.
On Sunday, July 6, the people of Mexico City will choose their government for the first time. Until now, the city has been led by a presidential appointee. One party, the PRI, has governed Mexico for six decades.
The election in the nation's capital, which is one of the world's largest cities, caps a movement toward openness in Mexico. From candy to autos to politicians, Mexicans have choices they have never had before.
The immediate hope of auto industry leaders is to end the federal tax on new autos, known as ISAN.
The tax starts at 2.5 percent on all cars, and it can go as much as an additional 17 percent above that. It is seen as a huge drag on a troubled industry. Automakers managed to get the tax reduced during the nation's 1995 economic collapse. But once things improved, the tax returned.
The tax also carries a paradox as it hits buyers of expensive cars the hardest. Yet those cars tend to be the cleanest, and the city's chronically bad air needs all the clean cars it can get. The city, with nearly 20 million people, holds 23 percent of the nation's autos.
The new mayor, who is elected for a three-year term, will have little direct influence on auto issues. But he can help set the national agenda. And the winning party gains influence in Congress.
Some industry officials have noted that a loss of power in the capital would sting the ruling PRI. And that threat could force the party to become more responsive - to the auto industry, as well as others.
The three parties and their candidates are:
The PRI's Alfredo del Mazo. He's the son of a PRI politician and former governor of the State of Mexico.
The PAN, a moderate party. Candidate Carlos Castillo has been a longtime party leader.
The left-leaning PRD. Candidate Cuauhtemoc Cardenas lost in a bid for the national presidency in 1994.
TOUGH TO CALL
Polls say the PRD will win. Many in the business community support PAN.
'I don't think that the PRI can win' said Arturo Munoz Cano, president of the Ford dealers association.
He said PAN presents the best chance of eliminating taxes on new vehicles.
'If the PRI wins the elections, everything will remain pretty much the same,' Munoz said.
Rodrigo Canseco, leasing manager of Automotores La Villa, a Volkswagen dealership, expects a victory by either of the opposition parties will boost consumer confidence. And that will boost auto sales by encouraging sales on credit.
The opposition parties are also more likely to talk about electric and alternative fuels. The current government has not set strategies in these areas.
Each party is promising to reduce crime and improve the quality of living. Any progress there could boost the sale of luxury cars and cars with a lot of special equipment. High-priced makes like BMW and Mercedes-Benz now offer armor car options as a protection against crime.