It’s Cheaper To Build Cars In Mexico
Where do you think is the best place to build a car? Most people would probably say China but fact is that it’s getting more expensive to build a vehicle there. Many more companies are actually setting up factories in Mexico.
Many European cars build cars in Mexico because it is close to the U.S border so it makes it easier to transport the finished product once it is built. Companies like Mercedes and Peugot have set up shop in Mexico in order to build more cars to sell in America.
In 2007 the auto industry was suffering a downturn and manufacturers were seeking locations where they could make their cars more cheaply. They settled on China and soon just about every auto maker whether from Europe, Asia or the United States had plants in China and joint ventures with Chinese auto companies for the construction of automobiles.
The economy is in a different place now and it is actually getting pricier in order to build cars in China. Moreover, there is growing uncertainty concerning the cost of production logistical problems and questions over intellectual property protection. As a result, the world’s biggest automotive are looking for a more viable location to build plants.
One of the main reasons why Mexico is a good spot is because it is right next to the Stats. That makes bringing the cars over so much easier and affordable. Mexico actually produced more cars than ever in 2010. In fact, now Mexico is in the top 10 when it comes to countries that are building the most autos.
A plant is currently being constructed in Mexico for Honda. This will be a huge, state of the art facility which will cost hundreds of millions of dollar to build. The company has scheduled the plant to begin making cars in 2014 and the plant will have the capacity to make 200,000 vehicles a year. Furthermore, the new plant is expected to help Honda build its vehicle capacity in North America from 1.63 million units to 1.83 million by 2014. Mccoy Mills Ford in Fullerton offers New Ford Anaheim in the cities of Fullerton, Anaheim and Brea.
An analyst with Edmunds.com asserts that Mexico is the perfect place for Honda to make its cars now. He noted that companies usually don’t make a ton of profit on small cars like the ones that Honda sells. Wages are lower in Mexico which allows companies to earn more profit. The automotive and global market is always changing and it will interesting to see where cars will be built 20 years from now. Only time will tell!
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