Dear Shareholders,
It is a pleasure to address you to share the results of TRATON Financial Services Mexico (formerly Navistar Financial) for fiscal year 2024, a year in which our strategic vision, adaptability and disciplined approach allowed us to reaffirm our financial strength, expand our market presence and consolidate key advances towards a more efficient, agile and sustainable model, in line with the global strategy of TRATON Group, the second largest commercial vehicle manufacturer in the world, which seeks to consolidate itself as a global player through a comprehensive financial presence.
During the year, we operated in an environment shaped by the sector’s technological transition, driven by the entry into force of NOM-044 issued by SEMARNAT. This regulation establishes that, as of January 1, 2025, manufacturers may only invoice wholesale vehicles that meet Euro 6 or EPA 24 emissions standards.
This regulatory change coincided with a period of unprecedented growth in Mexico’s truck industry. In 2024, the market reached an all-time record of 67,704 units sold at wholesale, which represented a 22.3% growth compared to the 55,119 units registered in 2023, which had already been an extraordinary year in terms of volume. This strong demand has been driven by sustained growth in the transportation sector, fleet renewal and increased product availability following the stabilization of supply chains.
In this context, and in preparation for the regulatory transition, International Motors Mexico (formerly Navistar Mexico) adjusted its production schedule in order to meet existing orders and anticipate market needs. This adjustment, known in the industry as “Pre-buy” or advance purchase, is a common practice when regulatory changes are approaching, as it allows distributors and customers to acquire units with current technology -in this case, Euro 5- before the regulatory cut-off, for their subsequent commercialization.
This strategy not only responded adequately to strong market demand, but also facilitated an orderly transition to the new emissions technologies. It enabled customers to plan their purchases in advance and ensured that the supply chain operated efficiently in the face of regulatory change, maintaining the dynamism of the sector without compromising regulatory compliance.
As a result, TRATON Financial Services Mexico recorded a significant increase in the number of units financed. This strategy not only responded to the immediate needs of our customers, but also allowed us to achieve historic growth in our total portfolio, which almost doubled compared to the previous year, with an outstanding participation of dealer financing.
To support this growth, and in line with our strategy of diversifying funding sources, at the end of 2024 we had authorized credit lines for 26,134 million pesos, from development banks, commercial banks and the debt market. The conditions associated with these lines allowed us to maintain an adequate match between our assets and liabilities, strengthening our financial structure.
In this context, the successful placement of a P$2 billion bond in the debt market stands out, consolidating almost two decades of experience as a recurring issuer backed by the confidence of institutional funds, Afores (Mexican private retirement fund administrators) and pension funds. This transaction reaffirms the growth potential we project for the company and supports our ability to access the necessary resources to drive the execution of our Business Plan.
Throughout this expansion process, we maintained the quality of our portfolio as a priority. At the end of 2024, the non-performing loan ratio decreased from 2.48% in 2023 to 1.58%, a result mainly influenced by the accelerated growth of the portfolio in the last quarter. Isolating this effect, the indicator would have remained at similar levels to those of the previous year. Nevertheless, we continued to strengthen the quality of our portfolio through improvements in our collection processes, more accurate risk management and close follow-up with our clients, supported by more effective recovery strategies, both with external firms and through our call center.
This comprehensive approach, which combines growth, operational discipline and prudent risk management, has strengthened our position in the automotive finance sector, consolidating us as a strategic partner within the transportation ecosystem. Our vision has been clear: to offer financial solutions that boost our clients’ productivity, profitability and adaptability to the challenges of their industry.
On the digital innovation front, we continued to strengthen our credit origination platform, reducing processing times, improving the traceability of operations and increasing customer satisfaction. During the year, 43% of financing requests were processed digitally, confirming the effectiveness of our technological strategy in responding to new market demands.
In the area of sustainability, we followed up on the measurement of our carbon footprint as a preliminary step to adopting future environmental commitments. In addition, we began financing the S13 model, the latest new-generation internal combustion engine, developed under the highest technological and regulatory standards. This model, which offers greater fuel efficiency and a smaller environmental footprint, makes it a strategic ally for our customers in the transition to cleaner mobility. Both efforts reflect our long-term vision, in which financing acts as a catalyst for the modernization of the sector and the promotion of solutions that integrate productivity, efficiency, and environmental responsibility.
On the commercial front, we expanded our coverage of points of sale and service throughout the country, strengthening both our relationship with our distributor network and our operational capabilities at the regional level. This strategic deployment, supported by the specialized knowledge of our team, has allowed for a more precise segmentation of our customers and a closer and more efficient service. As a result, we have strengthened the quality of our portfolio and contributed to local economic development and the growth of the country’s transportation sector.
In addition, thanks to a flexible funding strategy and strong relationships with commercial and development banks, we continue to serve traditionally underbanked segments through financial products and comprehensive solutions designed to meet their specific needs. Our vision is to continue closing gaps and democratizing access to financing, thus promoting the renewal of Mexico’s vehicle fleet-particularly in the freight transportation sector, whose average age in Mexico is more than 20 years old-with a positive impact on both productivity and the environment.
At TRATON Financial Services Mexico, we reaffirm our commitment to the creation of sustainable value for our investors, backed by a long-term vision, a solid institutional structure and an operating model based on principles of accountability and transparency.
2024 was a key year for laying the basis for our integration into the global deployment of TRATON Financial Services, as part of the TRATON Group’s strategic objective to consolidate a multi-brand financial platform with an international presence. Mexico plays a strategic role in this global initiative, and we remain firm in our intention to accompany our clients’ growth and actively contribute to the evolution of transportation.
On behalf of TRATON Financial Services Mexico, I would like to thank our entire team for their tireless commitment, our network of distributors for their strategic alliance, and our customers for their trust. To our shareholders and investors, my most sincere appreciation for your continued support, which has been key to our achievements this year.
We are confident that our solid performance in 2024 keeps us well positioned to successfully meet the challenges of 2025. We will continue to focus on strengthening our capabilities, preserving the quality of our assets, and moving forward with determination in our mission to drive the evolution of transportation in Mexico.
