Bloomberg Businessweek reported last week that Mexico plans to increase the number of automobiles that are manufactured within its borders by at least 38% , which equates to around one million additional vehicles, over the next three years. The boost comes as foreign automobile manufacturers announce plans to make greater use of Mexico as an export base.
“Investments already announced by carmakers will allow Mexico, the world’s fourth-largest auto exporter, to increase annual production from last year’s 2.6 million units, ” shared Carlos Guzman, president of ProMexico, which is the nation’s investment promotion agency. “Surging car and aerospace sales will help Mexican exports climb by about 15 percent this year to a record of around $400 billion, surpassing a $350 billion high reached last year.”
Mexico’s economy has been booming as of late, in part due to its strong auto industry, which will see record highs in both vehicle production and exports in 2012. Mazda Motor Corp., Nissan Motor Co. and Audi have all announced plans for new plants in Mexico real estate, which will help Mexico surpass Korea and become one of the world’s top three automobile exporters, second only to German and Japan.
“Other companies are exploring the possibility of opening facilities in Mexico, ” stated Guzman. “We expect a very good period of five to seven years in Mexico in terms of growing exports for cars.”
Mexico is currently Latin America’s second largest economy and it is growing at an astounding rate. This, combined with rising wages in China, Mexico’s strategic geographic location and higher shipping costs have made it increasingly attractive for Asian companies who rely on the U.S. market, which remains the world’s largest economy and is Mexico’s northern neighbor.
In addition to automobile companies, other companies associated with the industry, such as Pirelli, which manufactures tires, and Nippon Steel Corp, which crafts a variety of parts, have announced that they will open new plants in Mexico. All of this activity has helped Mexico beat some of the world’s top economist’s GDP forecasts for 2012, and the country’s growth has outpaced Brazil’s for the past 12 months and counting, with no signs of slowing down anytime soon.
“In 15 to 20 years, we will be talking about aerospace manufacturing in Mexico like we are talking about automotive manufacturing today, ” shared Guzman.