Fri, Apr 11, 2014 - Page 15 News List

Mexico overtakes Japan in car exports to the US

AFP, MEXICO CITY

Mexico’s booming auto industry has reached a major milestone, claiming to have overtaken Japan as the second-biggest car exporter to the US in the past three months.

The Latin American nation now only trails Canada, but experts say Mexico could become the top exporter to its northern neighbor as soon as next year, a potent symbol of its growing global clout in the sector.

Industry analysts had expected Mexico to surpass Japan by the end of the year, but the Mexican Automobile Industry Association (AMIA) says it has happened faster than expected.

“It does not surprise me that they did [overtake Japan], and that number will even get bigger,” Michigan-based WardsAuto Group industry analyst Haig Stoddard said.

The figure came in an AMIA report this week showing record production in the first quarter, with 774,731 units rolling out of plants in Mexico, a 6.5 percent increase from the same period last year.

AMIA, using its own statistics and WardsAuto figures, said the US imported 428,376 “Made in Mexico” cars, compared with 408,405 from Japan between January and last month.

Analysts say the figures are credible.

Latin America’s second-biggest economy has steadily grown as a global power in the auto industry, with most of the production destined for exports.

It is the world’s eighth-biggest automaker and the No. 4 exporter.

Relatively low wages, being next door to the massive US market and a raft of free-trade deals with other nations have combined to make Mexico a prime location for automakers.

“Mexico will continue to grow very strongly in the next five years,” AMIA president Eduardo Solis said.

In addition to its ideal geographic location, Solis said Mexico is a major auto parts supplier, home to a skilled workforce and backed by a government that invites investment by foreign companies.

Ironically, Japanese automakers have had a major role to play in Mexico becoming a manufacturing powerhouse, with Nissan Motor Co, Mazda Motor Corp and Honda Motor Co building factories in the country.

“[Japanese firms are] building a lot more cars in the United States and Mexico,” Stoddard said. “Going forward there’s going to be more production in Mexico of Japanese cars.”

In November last year, Nissan opened a US$2 billion manufacturing complex in the central state of Aguascalientes, its third in Mexico, which is to raise the company’s output in Mexico by 25 percent to more than 850,000 vehicles per year.

In February this year, Honda inaugurated a sprawling US$800 million assembly plant in the central state of Guanajuato, where it is producing the Honda Fit hatchback.

That same month and in the same state, Mazda opened a US$770 million factory to build compact models.

US and European automakers have also made huge investments in Mexico in recent years.

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