Automaker BMW warned on October 30, 2026 that the changes to the Income Tax Law (ISR) planned for 2027 could reduce the profitability of its dealerships and alter investment decisions for new dealerships in Mexico. The brand's CEO in the country, Diego Camargo Serna, said the company is reviewing the issue with its network and with the Mexican Association of Automotive Distributors (AMDA), according to El CEO.
The figure that explains the concern lies in the margins. The auto trade operates with a pre-tax profit of between 1 and 3%, so a dealership with a 2% margin would face an effective ISR rate of up to 50% versus the current 30%, according to AMDA. With a 1% margin it would reach 100%, and with 0.5% it would reach 200%, according to the same association, as reported by El Economista.
The mechanism is a cap on deductions. The proposal, which the Legislature approved and sent back to the Chamber of Deputies, limits the deduction of expenses to 96.6% of income and increases provisional payments. The Senate exempted automakers and gas stations from the limit; distributors were not included. AMDA estimates that up to 30% of its dealerships, close to 1,000 establishments, and 70,000 jobs are exposed.
Why it matters for Mexico: dealerships are the last link in the chain of the automakers with plants in the country, whose production and exports are part of trade under the T-MEC. If the tax cost reaches distributors, AMDA indicates, the channel that brings vehicles to the end consumer is affected.
BMW has 50 points of sale in Mexico. Camargo said a dealership in a small or medium-sized municipality could stop being an attractive investment and that the company is analyzing operational efficiencies and costs. The firm ruled out raising prices to compensate. Guillermo Rosales Zárate, AMDA's executive president, asked President Claudia Sheinbaum for a decree that recognizes the activity as low-margin. What's next: the ruling is in the Chamber of Deputies and the distribution network is waiting for the final framework before deciding on investments.
This article was written with the assistance of artificial intelligence from verified sources and reviewed by a human editor before publication.
