Mexico outruns Japan to become No. 2 auto exporter to the US image

Thanks to lower tariffs under the North American Free Trade Agreement, output almost tripled and auto exports from Mexico to the US more than quadrupled from 1993 to 2013. Now, the country is poised to eclipse the usual second top exporter to the US, Japan.

The Asian country shipping cars from Toyota, Honda and Nissan more than 5,000 miles across the Pacific has usually ranked among the top two auto exporters to the US since as back as the 1970s.

Consultant IHS Automotive estimates now that Mexico will send north of the border 1.9 million by 2015, also topping Canada as the biggest exporter of cars to one of the biggest economies in the world.

“It’s certainly a low-cost place to produce and there’s a lot of comfort with the caliber of the workforce in Mexico,” said Ron Harbour, a manufacturing analyst and partner at consultant Oliver Wyman. “In the late 80s and early 90s, what was coming in from Japan was overwhelming compared with what we thought about from Mexico back then. Obviously, things have changed.”

Japan, which in 2008 shipped almost twice as many cars as Mexico to US consumers, will be outrun by the Latin American country with the aid of three plant openings in the next four months – from carmakers Nissan, Honda and Mazda.

Guido Vildozo, an IHS Automotive analyst based in Lexington, Massachusetts, estimates that cars made in Mexico and sold in the US could reach approximately 1.69 million this year, outrunning the 1.51 million Japan-built vehicles. Vildozo added that US sales of Mexican-made cars may climb to 1.9 million, topping Canada’s 1.87 million, by 2015.
Via Bloomberg