December 26, 2004
GOOD FOR NATIVISTS, BAD FOR CONSUMERS:
Mexico's Economy Is Vrooming: North America's hottest auto market is now south of the border, thanks to a stable peso, lots of young drivers and pent-up demand. (Marla Dickerson, December 26, 2004, LA Times)
Dressed in a blazing pink jacket with purse to match, car shopper Erika Amador Martinez is the embodiment of Mexico's auto market — sizzling.The lawyer from Puebla arrived at an auto show here this month to browse among dozens of models. Topping her list is a Ford EcoSport, a sport utility vehicle that she covets for its practicality, not to mention the kicky red paint job.
"I'll pay part in cash and finance the rest," said the 27-year-old, who is tired of cadging rides from her boyfriend. "It's a lot easier to buy a car than it was a few years ago."
Armed with credit and spoiled for choice, consumers like Amador have turned Mexico into North America's hottest auto market. Although sales in the United States and Canada have stalled, Mexico is experiencing double-digit percentage increases in 2004, with buyers projected to purchase a record 1.05 million new vehicles by year's end.
That's more cars and trucks than will have been sold in Australia by the end of this year and in all but a few European countries. Some expect Mexico to overtake Canada in annual vehicle sales by the end of the decade.
The auto boom is indicative of a rebounding economy, lots of young drivers and years of pent-up demand. Banks scorched by Mexico's mid-1990s peso crisis are back and lending billions of dollars to consumers, whose choices rival anything in U.S. showrooms. Lured by free trade agreements and Mexico's sales potential, nearly 40 car brands are fighting for a piece of the market.
Already a major vehicle manufacturer and exporter, with companies such as Ford, General Motors, DaimlerChrysler, Volkswagen, Honda and Toyota operating plants here, Mexico's growing domestic market could provide an added incentive for automakers to expand production in the country.
If the economies of Latin America continue at this pace, Tom Tancredo will have to mow his own lawn. Posted by Orrin Judd at December 26, 2004 10:01 AM
The horror, the horror.
Posted by: Paul Cella at December 26, 2004 10:22 PMIf Mexican workers can remain in Mexico, then Tom Tancredo will be more than happy to mow his own lawn. If he's not, I'll mow his lawn.
Posted by: John J. Coupal at December 26, 2004 10:33 PMMexico is fascinating today. There is a growing bi-lingual middle class, often American educated, which is buying most of the more upscale products that would have been unthinkable a generation ago.
However, because universal public education is more a dream than a reality, there is still an enormous and expanding underclass for which access to unskilled employment in the US is a major safety valve. Mexico's population still grows at a much faster rate than its economy can absorb.
Mexico has 4 times as many people as Canada, that it isn't buying as many cars tells us just how far it still has to catch up.
Posted by: Bart at December 27, 2004 6:32 AM