Mexican Auto Industry Triumphalism

While on a swing through Coahuila the other day, Calderón said that Mexico was a world champ in the auto industry. It's true that triumphal comments from any president should be taken with a grain of salt, and Calderón probably more than most, yet a recent FT piece makes you think that he may be onto something:

Automobile production has taken off in Mexico this year as the country recovers from its worst recession last year since 1932. Car exports to September reached 1.4m units, up 71.2 per cent on last year and 10.5 per cent on 2008, the best year on record.

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The growth has come mainly in so-called “compact” and “sub-compact” vehicles as manufacturers discover that Mexico offers one of the best export platforms to meet global consumers’ increasing preference for smaller, cheaper cars.

In addition to VW’s $1bn investment to develop and produce the new Jetta in Mexico, Ford this year turned its Cuautitlán stamping and assembly truck plant into a production facility for its Fiesta compact model, which it will sell in North America.

Since 2008 Ford has invested about $3bn in Mexico, including a 25,800 sq m expansion at Cuautitlán with its five new lines of presses and 270 robots, a new diesel-engine plant in the northern state of Chihuahua and a new plant to supply automatic transmissions for the new Fiesta.

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“You can produce an SUV anywhere in the world and make a profit but you can’t make a compact car anywhere,” said Mr Karig. “That is why Mexico has emerged as a global centre for producing small cars.”