Mexico auto production and exports rose in September compared with the same month last year, the Mexican Auto Industry Association (AMIA) said on Monday.
Mexico auto production output was up 10.7 percent in September, while shipments were up 2 percent for the month, AMIA said.
Mexico’s rising auto fortunes were solidified earlier this year when its production surpassed that of Latin American rival Brazil. Auto industry analysts predict the trend to continue after manufacturers like BMW announced plans to invest $1 billion in a plant in the central Mexican city of San Luis Potosi that will build 150,000 new vehicles a year starting in 2019. The German automaker follows Honda and Mazda, both of which opened plants in the south central Mexican state of Guanajuato earlier this year.
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“The auto industry in Mexico is just booming, it’s taking off right now and it´s probably the industry in which Mexico is the most competitive,” said Christopher Wilson, a senior associate with the Mexico Center at the Woodrow Wilson International Center for Scholars in Washington, D.C.
Wilson and others say Mexico’s ascension is a combination of low labor costs, a shift to an export-based economy in which 80 percent of vehicles produced in Mexico go to the powerful U.S. market, a well-defined NAFTA corridor, and modern factories that are more efficient and safe. An influx of banks has provided workers with greater access to credit.
“It´s gotten to the point where you really have this pipeline of investment in Mexico that includes just about every major manufacturer in the world,” said Wilson, who leads research and programming on regional economic integration and U.S.-Mexico border affairs.