Made in Mexico

Monday, June 9

Ford has announced that it will invest 3 billion dollars in Mexico in a move which confirms the recent rebound of the auto sector.

According to the Economy Ministry, Mexico was the world's tenth most important vehicle producer in 2007, with production exceeding 2 million.

The auto industry's domestic importance is huge. National Institute of Statistics and Economy Ministry figures show that it represents about 3% of GDP, 15% of manufacturing output, and employs some 1 million people.

Production reached record levels in 2007 following a clear, strong recovery over the past two years. This trend seems set to continue:

• Vehicle production stood at 188,090 units during April, a 28.4% year-on-year increase.

• The January-April total, at 679,981 units, represented a 13.8% year-on-year rise.

Exports are the main growth driver, with the number of vehicles sent abroad rising 18.5% in January - April. While the US market remains (and will remain) the most important destination for auto exports, there has also been some diversification, with sales to Europe rising from 10.0% of the total last year to 14.4% of the total during January – April.

Mexico could become a global production centre for small vehicles. But several problems must first be addressed, including high input costs and poor infrastructure.