The NAFTA region has the United States, Canada and Mexico under one commercial umbrella, but the countries are active combatants when it comes to securing automotive investments and creating new jobs.
Today Mexico looks set to be the auto industry “princess”, Canada is fighting for the survival of its manufacturing footprint and the US is divided once more in terms of North and South. The latter has had its fair share of new automotive investment and jobs, though most of them has gone towards the South, which is traditionally against the UAW-regulated and unionized North. The trio is a combined trading block under the North American Free Trade Agreement, or NAFTA, but also bitter competitors when it comes to investments in the automotive industry. Mexico is shaping up to be the potential winner – thanks to a set of unique combinations. It has a geopolitical advantage, sitting right in the middle of the continent and regulating the flow between North and Latin America, it has had a flurry of trading agreements with the entire world and is cheaper when it comes to personnel than neighboring America. While the relative fortunes of the three countries have seen numerous changes over the years, for the upcoming future, the more South you are located, the better.
In terms of raw data, of the autos manufactured in North America last year, around one in five was made in Mexico – as the country doubled its production output capacity since 2004. WardsAuto, a tracker of production figures, said the prediction is that by 2020 it will rise to build one in four. “The U.S. South and Mexico are winning the battle,” comments Dennis DesRosiers, president of DesRosiers Automotive Consultants near Toronto.