Automakers pledging more than 20 billion dollars in Mexico could be hindered by ports image

North American manufacturing has been gaining a tremendous amount of power in recent years, especially as carmakers from Nissan to Daimler have been pouring billions of dollars in new plants.

The auto manufacturers have been attracted by the nation’s low labor costs, strategic geographic position between the two Americas and the myriad of trading agreements with nations around the world. And the companies are producing a record number of vehicles for export abroad, with new records forecasted for each upcoming year as the new factories start churning out their vehicles. But there are voices among auto executives who fear the assembly pace would be bottled in coming years because the exports need to be passed through the country’s port infrastructure. The Mexican government mulls investment of 70 billion pesos ($4.6 billion) for port infrastructure through 2018, including four new terminals at the Veracruz location.

But experts are growing weary of the timeline, expecting delays and say that even if it’s met on time it could be insufficient to outweigh the more than five million vehicles to be produced in Mexico by the start of the next decade – 56 percent up from the tally seen last year. In the past two and a half years, no less than 22.6 billion dollars have been spearheaded for Mexico investment by auto manufacturers, says the local government. But the success could be in danger if the sector doesn’t benefit from massive infrastructure enhancements. Nissan, for example, after Mexico became its largest exporting country, expects over the next five years delays in the ports accounting for a quarter of its forecasted maritime exports.

Via Bloomberg