Mexico auto production is on the rise, according to Reuters.
Car production has risen by 2.7 percent in Mexico to a total of 249,440 vehicles. Exports have dropped slightly to reach 177,928 units.
Cars are a major part of the Mexican manufacturing industry, and if cars are doing well, it is often a sign that the industry as a whole is strong.
Shipments to the U.S. represented over 70 percent of all exports.
Nearshoring causes manufacturing boom
The growth of Mexico's auto industry is due in part to manufacturing companies expanding to Mexico. In an interview with Manufacturing.net, Joe Atikian, a noted manufacturing expert, said Mexico has a long history of integrating global businesses into its economy. He also spoke of Mexico's great capacity for growth, as well as its capable and motivated workforce. Atikian also explained the benefits of Mexico's proximity to America, which improves its ability to speed development and make the supply chain short and efficient.
In fact, according to The International Business Times, Mexico may even surpass Brazil as the next major emerging market.
During the U.S. financial crisis of a few years ago, Mexico also fell into a deep recession, but slowly and steadily, that has begun to change and Mexico is starting to grow and expand. Its GDP growth is estimated to be 4 percent in 2014, according to The International Business Times article. Additionally, some analysis firms have placed Mexico above Brazil in their credit ratings.
Mexico has been focusing on renewing its industry and making it suitable for exports, The International Business Times reported. The president has been making efforts, according to the article, to add reforms. They have also begun cultivating new trade partners.
And the North American Free Trade Agreement (NAFTA) hasn't hurt either. NAFTA has effectively eliminated tariffs from trading goods between Mexico, the U.S. and Canada. This is making it a great place for offshoring. Goods can be manufactured in Mexico at a low cost and shipped to America.