Why Mess With the U.S. Auto Industry’s Success?

10/16/2017 RealClearWorld

By Duncan Wood

Since the economic crisis of 2008-2009, the U.S. auto industry has been on a tear. Despite the claims of the Trump administration, there are 1 million more cars per year built in the United States now than in 1993. The United States has never before seen such extraordinary automotive production, and the industry has not been this competitive against foreign imports since the 1960s. Between 2009 and 2016, more than 276,000 automotive jobs have been added in the United States (a jump of 41.6% percent), jobs with generous salaries and benefits. Auto-parts producers have also benefited as service providers, as vehicle sales have risen to record levels.

What made this transformation possible? In part it was due to changes demanded by the government in exchange for bailing out the industry, and in part to the opportunity seized by the industry to modernize practices that had held back its competitiveness. But a major factor in the automotive renaissance in America has been the role played by the integrated production system incorporating suppliers and plants in Mexico and Canada, and across the world.

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Mexico luring new auto plants

04/30/15 The Columbus Dispatch

iStock_000008876270MediumMexico has become the most-attractive place in North America to build auto factories, a shift that has siphoned jobs from the U.S. and Canada while also helping to keep car and truck prices in check for consumers. In the past two years, eight automakers have opened or announced plants or expansions in Mexico. Earlier this month, Toyota announced a plant in Guanajuato that will build the popular Corolla — work now done in Canada — while Ford unveiled plans for Mexican engine and transmission factories. Honda opened a plant last year in Celaya, Guanajuato, that builds the Fit subcompact and HR-V crossover. The $800 million assembly plant is Honda’s eighth in North America, adding to capacity that includes two plants in central Ohio.

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Mexican Auto Industry Accelerates in Early 2015

02/09/15 Wall Street Journal

iStock_000008876270MediumMexico’s auto industry, which powered a large part of the country’s manufacturing gains last year, got off to a strong start in 2015 by producing 6.8% more cars and light trucks in January than in the same month a year ago, the auto industry association AMIA said Monday.

The increase in output to 266,424 units was supported by a 15% rise in exports to 204,907 units, and a 21% jump in domestic new car sales to 103,697 units.

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Ferrari Head of North America: Mexico Is The Next China

iStock_000008876270MediumForbes, 6/5/2013

Forget the hype about China – Mexico is the next big thing for automakers. “Mexico is the next China,” Ferrari North America CEO Marco Mattiacci said during a panel discussion today about the future of luxury. He was joined by Burgess Yachts CEO Jonathan Beckett and Gotham Jets CEO Gianpaolo De Felice for the hour-long talk, which was held aboard the $40 million yacht KATYA berthed in the Hudson River off New York’s West Side Highway.

Mattiacci said the massive growth anticipated in revenue and manufacturing didn’t necessarily pertain to Ferrari but to a broader 13-year expansion in the auto industry due mainly to dramatic wealth creation, an increased appetite for industry and from considerable investments from abroad. “We see indicators that lot of manufacturing is moving back to Mexico,” Mattiacci said. “The quality of education is absolutely outstanding, and you have a proximity with the U.S. as well. Plus there has been a change of government.”

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Adios Motor City: How Mexico is becoming the world’s best place to make cars

iStock_000008876270MediumQuartz, 5/9/2013

Mexico’s auto production has taken a big leap since NAFTA. The country now accounts for roughly 20% of North American light vehicle production, according to a report this month by the Federal Reserve Bank of Chicago, compared with a 6% share in 1990. The country’s cars aren’t only traveling north. Mexico has become the world’s fourth-largest auto exporter an important global auto exporter, and it’s a good market to be in: Climate change and rising gas prices have trimmed margins on automobile sales and prompted a global shift among automakers to more efficient production hubs. Automakers from all around the world are flocking to Mexico to capitalize on the country’s low production costs and export-friendly environment.

The cars that roll off Mexico’s assembly lines are traveling far and wide; Only 63% of Mexican-made cars are exported to the US, and 45% of the exports are made by automakers with headquarters in Asia and Europe. “Mexico is becoming one of the best places to manufacture cars,” said Audi Chief Communication Officer Joe Jacuzzi. How did that happen?

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Mexico: getting some Audi love

Audi-Q5Financial Times, 5/6/2013

The auto industry’s love affair with Mexico seems to know no bounds these days. Just days after Japan’s Honda announced the creation of a $470m transmission plant in the country, it was the turn of Audi to laid the foundation stone for a $1.3bn assembly plant in Mexico over the weekend. Aimed at challenging BMW’s global leadership of the international luxury SUV market, the new factory is expected to come on stream in 2016, building 150,000 Q5 SUVs a year. In addition, Rupert Stadler, Audi’s chief executive, said the company is mulling a Q6 version that would double the plant’s capacity.

The plant is being build at San José Chiapa between the city of Puebla and the port of Veracruz, handily located for shipment of vehicles to the US eastern seaboard and Europe. While many of the new investment in Mexico’s export-led auto industry has been heading to the nation’s Colonial heartland and further north, Puebla is a home-from-home for German carmaker Volkswagen, the parent company of Audi.

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Chrysler says Mexico plants idled indefinitely

Reuters, 5/29/2009

U.S. automaker Chrysler has suspended operations indefinitely at all five of its Mexican plants, including two car assembly factories, as the company tries to emerge from bankruptcy.

The shutdown began about two weeks ago and there are no plans yet for restarting, Manuel Duarte, Chrysler’s spokesman in Mexico, said on Friday. “We are still monitoring the market situation to see when production can begin again,” Chrysler said in an e-mail statement.

Mexico is one of the world’s top auto producing countries and an industrial powerhouse. The U.S. recession is slamming its economy as Americans cut back on everything from cars to refrigerators.

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