Sun, Feb 23, 2014 - Page 14 News List

Mexico set to overtake Japan
as second-largest car exporter to US

Low wages, proximity to the US and free-trade deals with more than three dozen nations have made Mexico a favorite among global automakers

By Adriana Gomez Licon  /  AP, CELAYA, Mexico

“It’s one of the most modern industries that is generating the most money for the country,” said Huberto Juarez, an auto industry expert at the Autonomous University of Puebla. “It’s not right that these workers are making so little.”

Solis says wages are low compared with the US and Canada, but says the boom is creating a new generation of young engineers and funding automotive research in Mexico.

“It’s not only about lower salaries. That’s short-sighted. It is a component of a larger equation that has to do with the expertise we are developing,” Solis said.

Much of the new production is by Japanese firms drawn by the ability to move parts into Mexico without tariffs. Local governments have been competing for new plants by offering tax exemptions, employee training and improved highways connecting the plants to the US border and Mexican ports.

Just 40km from the new Honda plant, Mazda is set to open a factory next week to produce 230,000 cars a year. Nissan is expected to turn out 175,000 cars annually at a US$2 billion plant it opened late last year in the nearby state of Aguascalientes, and Audi will be producing luxury models at a plant in the state of Puebla that is scheduled to open in 2016.

“We have gained momentum throughout the years,” Guajuardo said.

“Now Mexico is attracting international attention because it has proven to have quality of production and a friendly investment climate,” he said.

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