Over the past twenty years, and especially the last ten, Mexico has been making major progress as a major exporter of cars and trucks to the United States. Although Japan and Canada still control the market share, Mexico has been making inroads that point to them surpassing and overtaking these wealthy first world countries as a major automobile supplier.
A new Honda plant is due to open later this week in Celaya, Mexico, in the central state of Guanajuato. At a cost of about $800 million, the factory will produce about 200,000 Fit hatchbacks per year. That will bring the total number of cars exported to the US from Mexico up to 1.7 million in 2014. That is about 200,000 more cars than the US will buy from Japan in 2014. And when another new plant begins production a week later, Mexico will take over Canada’s number spot as the largest seller of cars to the US in the world by 2015.
“It’s a safe bet,” said Eduardo Solis, president of the Mexican Automotive Industry Association. “Mexico is now one of the major global players in car manufacturing.”
The progress Mexico has been making can be traced back to the passage of the North American Trade Agreement, (NAFTA) which went into force on January 1, 1994. Back then Mexico made only 6 percent of all the cars manufactured in all of North America. Today they produce 19 percent. Since 2007 total Mexican car production rose 39 percent, to almost 3 million cars a year. The value of those exports to the US has soared from $40 billion per year in 2007 to $70.6 billion today.
The Mexican car industry is now the country’s major source of foreign currency, passing oil exports and cash Mexican migrants to the US send back home.