Mexico to increase its annual auto production by 1 million vehicles within 3 years

Article by Christian A., on August 29, 2012

Foreign manufacturers have come to use Mexico as an export base. Because of this, Mexico will increase its annual auto production by 1 million vehicles within three years, a 38% increase compared to the past year, according to Carlos Guzman, who leads ProMexico (the nation's investment promotion agency).

When interviewed at Bloomberg's Mexico City office last Monday, Guzman said that the investments will enable Mexico (the No. 4 biggest auto exporter in the world) to raise its annual production from the 2.6 million units recorded last year. He said that increasing car and aerospace sales will drive up Mexican exports by about 15% this year to a record-breaking figure of about $400 billion, exceeding a high of $350 billion hit last year.

On August 6, the country’s Automobile Industry Association (AMIA) said that Mexico's economy is proving itself to be resilient as its auto industry expands. Vehicle production and exports have reached their peak levels in the January to July 2012 period. He added that the new factories of Mazda Motor Corp., Nissan Motor Co. and Audi AG will aid the nation in closing the gap with Korea, the biggest exporter after Germany and Japan.

He said that other companies are looking into the possibility of opening facilities in Mexico. He anticipates a “very good” period of 5-7 years in Mexico when it comes to increasing the exports. As wages in China increase and the more expensive oil prices raise the costs for Asian companies that hope to reach consumers in the U.S, the manufacturers are choosing to open new plants in Mexico (the No. 2 biggest economy in Latin America). The Economy Ministry said that the auto companies have announced plans to invest $5.3 billion from January to April. Last year, investments had totalled $2.8 billion. [source: Automotive News - sub. required]

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