Volkswagen JettasCELAYA, Mexico – Mexico is on track to overtake Japan and Canada and become the United States’ No. 1 source of imported cars by the end of next year, part of a national manufacturing boom that has turned the auto industry into a bigger source of dollars than money sent home by migrants.
The multibillion-dollar wave of new factories is raising hopes that the North American Free Trade Agreement is fulfilling its promise of fueling growth and diminishing poverty south of the border, and it has turned a handful of central Mexican cities into bright spots of prosperity.
But critics note that a major attraction for car manufacturers are Mexico’s low and stagnant wages, which have helped kept the poverty rate between 40 and 50 percent since the passage of NAFTA two decades ago.
An $800 million Honda plant opening Friday in the central state of Guanajuato will produce about 200,000 Fit hatchbacks a year, helping push total Mexican car exports to the U.S. to 1.7 million in 2014, roughly 200,000 more than Japan, consulting firm IHS Automotive says. And, with another big plant starting next week, Mexico is expected to surpass Canada for the top spot by the end of 2015.
“It’s a safe bet,” said Eduardo Solis, president of the Mexican Automotive Industry Association. “Mexico is now one of the major global players in car manufacturing.”