Executive Briefings

More U.S. Cars Are Being Made in Mexico

The "Made in Mexico" label has become more plentiful on American car lots this year, even as automakers pressured by President Donald Trump began the year with promises to create more jobs in the U.S.

More U.S. Cars Are Being Made in Mexico

A move by automakers to produce some popular sport-utility models in Mexican factories helped spur a 16-percent increase in production of light vehicles in Mexico during the first six months of the year compared with the same period in 2016. At the same time, tepid sales of sedans held down production in the U.S. and Canada, according to new data posted by WardsAuto.com.

The data indicates one in five cars built in the North American Free Trade Agreement zone comes from Mexico, including hot new products from General Motors Co. and Fiat Chrysler Automobiles NV. That is up from the industry’s reliance on Mexico during the financial crisis, when the U.S. car business received billions of dollars in bailouts aimed at preserving jobs and keeping domestic competitors afloat.

Trump launched several attacks on Mexican car imports throughout his campaign and after his election, saying more auto-factory jobs should remain in the U.S. Since then, automakers have committed to several initiatives, including a move by Ford Motor Co. to scrap an assembly plant being built in Mexico and invest some of the money saved in a Michigan factory that will add jobs. GM and Fiat Chrysler have said they intend to invest billions of dollars to add jobs in factories in coming years, citing favorable policies related to tax reform and other issues as reason for optimism.

The Trump administration in August will start new talks with Canada and Mexico on an overhaul to Nafta. The vehicle-manufacturing business — including a sprawling supply base — is a central negotiation point.

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A move by automakers to produce some popular sport-utility models in Mexican factories helped spur a 16-percent increase in production of light vehicles in Mexico during the first six months of the year compared with the same period in 2016. At the same time, tepid sales of sedans held down production in the U.S. and Canada, according to new data posted by WardsAuto.com.

The data indicates one in five cars built in the North American Free Trade Agreement zone comes from Mexico, including hot new products from General Motors Co. and Fiat Chrysler Automobiles NV. That is up from the industry’s reliance on Mexico during the financial crisis, when the U.S. car business received billions of dollars in bailouts aimed at preserving jobs and keeping domestic competitors afloat.

Trump launched several attacks on Mexican car imports throughout his campaign and after his election, saying more auto-factory jobs should remain in the U.S. Since then, automakers have committed to several initiatives, including a move by Ford Motor Co. to scrap an assembly plant being built in Mexico and invest some of the money saved in a Michigan factory that will add jobs. GM and Fiat Chrysler have said they intend to invest billions of dollars to add jobs in factories in coming years, citing favorable policies related to tax reform and other issues as reason for optimism.

The Trump administration in August will start new talks with Canada and Mexico on an overhaul to Nafta. The vehicle-manufacturing business — including a sprawling supply base — is a central negotiation point.

Read Full Article

More U.S. Cars Are Being Made in Mexico