Mexico is primed to overtake Canada and Japan as the largest auto exporters to the United States. In 1990, Mexico exported fewer than a quarter of a million vehicles to the US. But according to IHS Automotive, Mexico is expected to export 1.9 million vehicles into the US in 2015, effectively dethroning Canada as the biggest exporter of cars to the country.
The significant surge in auto exports from Mexico to the US has been boosted by lower tariffs under the North American Free Trade Agreement. For this year, Mexico is expected to overtake Japan as three Japanese carmakers -- Nissan Motor Co., Honda Motor Co. and Mazda Motor Corp. -- will open three sites in the Latin American country in four months.
Guido Vildozo, an IHS Automotive analyst, remarked that Mexico-built vehicles sold in the US will reach 1.69 million this year, topping the 1.51 million Japan-built vehicles. He added that by next year, Mexico-produced vehicles sold in the US will reach 1.9 million, topping Canada's 1.87 million.
"It's certainly a low-cost place to produce and there's a lot of comfort with the caliber of the workforce in Mexico," said Ron Harbour, a manufacturing analyst and partner at Oliver Wyman.
"In the late 80s and early 90s, what was coming in from Japan was overwhelming compared with what we thought about from Mexico back then. Obviously, things have changed." The new sites will produce new small cars like the Honda Fit and Nissan Sentra, boosting Mexico's share of the US import market for passenger vehicles and light trucks, pegged at $150 billion.