Ford will invest $1.6 billion to build small cars in Mexico, the company announced today, defying the protests of Donald Trump and angering the UAW.
If you look at the Sprinter and wonder how Mercedes-Benz can possibly compete against locally produced commercial vehicles with a model built in Germany and shipped over the Atlantic, you're not alone. In fact, in order to mitigate the tariffs (but at the cost of added logistical expense), Mercedes builds the vans in Germany, takes them half apart again, ships them as kits and reassembles them in Ladson, South Carolina.
Mexico has long been a hot spot for auto manufacturing, but the country's fortunes have been boosted lately, with Honda, Mazda and Nissan recently adding factories there, and BMW is said to be poised to join them soon. Now, new reports indicate that Kia might start building south of the border to keep up with demand.
Volkswagen manufactures in Mexico. Soon Audi will as well, and Mercedes-Benz is said to be working on a deal to assemble some of its cars at a Nissan plant in Mexico too. That leaves BMW out of the mix of German automakers building cars South of the Border, but that may soon be rectified, as well.
With fluctuations in international currencies and rising shipping costs to take into account, foreign automakers can't get away with building cars overseas and selling them in North America as easily as they used to. Particularly with inexpensive mainstream models. And given the benefits of cheaper labor and free trade under NAFTA, many have opted to assemble their cars for the North American market in Mexico. That's why the likes of Toyota, Mercedes and BMW have all opened plants in Mexico. And
The very first Mexican truck is set to enter the United States seventeen years after a provision in the North American Free Trade Agreement allowed cargo carriers from the south to carry freight across the border. The provision has faced stiff opposition from lawmakers and union officials alike, with the latest hurdle coming from the Obama Administration. In early 2009, the administration canceled a pilot program that would have had Mexican drivers making deliveries on a trial basis that year. M
Canada is opening its used car market to vehicles from Mexico to fulfill the obligations of the North American Free Trade Agreement (NAFTA). While vehicles 15 years old or older can already be imported to Canada, this move concerns late-model used vehicles. The only other country Canada accepts used vehicles under 15 years old from is the United States, and NAFTA stipulates that Canada should have already completed this bit of border opening by the end of 2010.
Mexico hasn't accounted for nearly as much ink as the U.S. and Canada in recent discussions of the auto industry. But in case anyone was wondering, they're in a big hurt south of the border as well. While the American market's decline in auto sales factors in at about 25% overall, the Latin American Herald Tribune reports that Mexico has seen a 30.6% drop in sales volume.
Now that the "Cash for Clunkers" bill has passed Congress is ready for President Obama's signature, the next question is: What car should you buy with your trade-in bonus? There were two primary motivations behind this legislation, economic and environmental. From an environmental perspective the idea is to get older, more polluting and fuel consuming vehicles off the road. On the economic side, Congress wanted to stimulate sales of new cars, especially domestically built models.
Canada's Environment Minister Jim Prentice believes that there should be a single fuel efficiency standard for all countries in North America. He says, "At this point in the United States, it would appear as though they are headed toward a 35 mile a gallon standard by 2020 and that would start to come into effect in the 2011 model year. We've essentially been prepared to go in that same direction."
If you thought trading in your old gas-guzzling car or truck for a shiny new hybrid or subcompact would help the planet by taking it off the road for good, you'd better think again. Shipping those old road warriors south to Mexico is now a big business. According to the Los Angeles Times, the armada of Detroit iron flooding across the border is large enough to sustain 25,000 families via the used car trade in Juarez City alone.