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Mexico Auto Output to Jump 38% in 3 Years

Low wages, good location offset concerns about the ongoing drug war.

by on Aug.30, 2012

Workers in Puebla gathered to celebrate the launch of production of the latest VW Beetle.

While Mazda may have abandoned its decades-old joint venture with Ford, transferring production of the Mazda6 sedan back to Japan, the maker isn’t walking away from North American production entirely.

By mid-decade, the Japanese maker plans to open a new factory in Mexico to produce smaller products like the Mazda3.  And it isn’t alone.  Honda, Audi and Nissan are among the growing list of automotive manufacturers who have announced big plans for Mexican plants.  Mercedes-Benz is also expected to add an assembly line South of the Border to complement the factory it currently operates in Alabama.

It’s all expected to add up to a whopping 38% jump in automotive production in Mexico over the next three years – an additional 1 million vehicles, according to the head of that nation’s investment promotions agency.

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“Other companies are exploring the possibility of opening facilities in Mexico,” Carlos Guzman, president of ProMexico, told the Bloomberg News Service. “We expect a very good period of five to seven years in Mexico in terms of growing (automotive) exports.”

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