Mexico to become top car exporter to the US

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Mexico is on track to overtake Japan and Canada as the top automobile exporter to the United States. This accomplishment is expected to take place by the end of 2015. It is hoped that this expansion of car manufacturing in Mexico will help the country to pull millions out of poverty and replace some of the dependence on money being sent back by migrants to the U.S. However, it’s too early to determine if this new trend will have such a positive outcome. Many critics are quick to point out that those new jobs are low skill jobs and pay too little. Wages in Mexico are extremely low and stagnant. The poverty rate has remained between 40 and 50% despite the enactment of the North American Free Trade Agreement in 1993.
Honda opened an $800 million plant on February 21st, 2014 which will produce over 200,000 Honda Fit hatchbacks and compact SUVs. This development will help to raise total vehicle exports to the US to 1.7 million this year, surpassing Japan’s exports by 200,000 cars. This is just one example of why Abenonics has not succeeded to raise Japan’s exports as much hoped. Japanese manufacturers have moved and continue to move production facilities out of Japan one after another.
According to an article in the Japan Times, Mexico now produces 19% of all the cars produced in North America and manufacturing is now less expensive than many places in China. Mexico’s 580,000 auto workers are paid about $16 per day which is $4 less than US workers are paid per hour. More than half of Mexico’s auto workers are paid less than $15 per day.
In March 2014 Mazda will open a factory just 40 km from the new Honda plant to produce 230,000 cars a year. Nissan plans to open a $2 billion plant late next year to produce 175,000 cars annually and Audi will begin producing luxury cars at a plant in the state of Puebla from 2016. Maybe I need to open a Spanish Conversation School too. ¿No lo crees así? (Spanish for “Don’t you think so?”)

Written and Narrated by Al Bartle with information from the Japan Times


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