Mexico auto industry income exceeds foreign reserves generated from oil exports and remittances from migrants
It is expected that by the end of 2015, the Mexico auto industry exports purchased by consumers in the United States will exceed those manufactured and shipped to America from Japan. In other words, Mexico is poised to become the number one supplier of imported automobiles to the U.S. market. Activity in the industry is changing some of the dynamics of the Mexican economy.
Im recent years Mexico auto industry growth has proceeded at an accelerated pace. Most of the activity in the sector that has occurred in recent years has transpired in the country’s South Central region, mainly the states of Guanajuato, Queretaro and Aguascalientes.
Upon the signing of the NAFTA in 1994, Mexico was the source of only six percent of light vehicles produced in North America. Today that number stands at nineteen percent. The growth in the industry from 2007 to the present has been particularly robust, rising by thirty nine percent, while reaching a production level of approximately three million units. Due to this increased investment, job creation and export activity, revenue generated by foreign sales of Mexican manufactured automobiles, principally in the U.S., has made the industry the country’s largest source of foreign reserves. The Mexico auto industry has supplanted oil and remittances from migrants as the country’s main source of revenue.
Since 2008, employent in the country’s automotive industry has risen by 100,000 employees. Today, the approximate number of individuals employed in foreign-owned light vehicle manufacturing facilities has risen to 580,000 individuals.
On the negative side, there are some critics of the wage structure prevalent in the Mexico auto industry, where line workers may typically make sixteen dollars a day. In response to those that focus only on this issue, Eduardo Solis, president of the Mexican Automotive Industry Association, points out that to do so is to take a “shortsighted” view of the importance of the industry to the development of the country, and the Mexican peoples’ productive capacities.
Because of the growth of the automotive industry in Mexico, the country’s educational system is developing a large cadre of young engineers and technicians that form the basis of a significant portion of the country’s expanding middle class. Mexico is also making steps towards becoming a source of automotive industry design talent, as well.
Read the primary source for this post at USA Today.