Car companies have moved to Mexico from other countries such as the U.S. Nissan is the largest producer in Mexico, and recently, Audi, Kia, Toyota, and BMW have either relocated to Mexico or announced a future move. According to CNBC, in the last seven years, manufacturers have spent $13.3 billion for manufacturing facilities in Mexico. Some of the vehicle manufacturers in Mexico are also trying to increase the amount of plants in the U.S.
USA Today states that compared to Canadian and U.S. manufacturers, Mexico made a fifth of the amount of vehicles in 2004, and in 2020 it is predicted to be 25%. They also stated that Mexican made vehicles increased 10%.
In North America, there is a NAFTA agreement. This agreement
prevents taxes on any imports or exports from and to any country in North America. This allows for car companies to move to Mexico without any penalties or taxes. Although Americans can get cheaper automobiles from Mexico because it costs less to manufacture them there, jobs are being lost because car companies can save money by moving out of the U.S. according to CNN. There is a great deal of controversy on this issue, and President Trump feels that NAFTA was the “worst trade deal in history”. Ford has continued relocating to Mexico even with President Trump’s comments, and you can read more Here. Also, the New York Times discusses about new Chinese plants.
CEOs have stated why they moved to Mexico and if it will be temporary. The CEO of Honda, Takahiro Hachigo, discussed how his company is manufacturing in Mexico and if he will move out of Mexico soon. He stated: “We produce cars in Mexico for markets including North America and Europe and we have no immediate plan to change this.” Business Insider discusses further in depth about Honda and its Mexican plants. Below is an interactive before and after of one of Honda’s Mexican plant. Images used below are from Google Maps Street View – Map data ©2017 Google. Links to the specific images are below this interactive feature.