Mexico, it seems, is an automotive backwater. The country’s consumers are expected to buy barely 1.06m cars and light trucks this year—down nearly 10% from the already weak 1.15m in 2005. Put another way, this is barely one new vehicle for every 150 Mexican residents, compared to more than one for every 20 citizens in America.
So why did Nissan, the Japanese carmaker, this week open a new $2 billion assembly complex in the city of Aguascalientes? And why are manufacturers such as Mazda, Honda and Audi racing to set up factories in Mexico, while General Motors, which already has operations in the country, is set to invest another $700m?