Automakers Spur $3 Billion Boom for Made-in-Mexico Steel
Mexico is on the verge of moving onto a much better economy, and the automakers are a huge factor in that shift. Now, the steel producers in Mexico are able to benefit from increased activity in the production of cars, and they are currently working to improve their factories so that the expected increase in demand can be met.
Mexico is in prime position to take over a very large portion of the market for cars due to its geographical location. Also, wages are fairly steady, measured at about 20 percent f the U.S.’s and Canada’s wages, and Mexico is working to provide a better environmental for businesses. In fact, Mazda plans to open a $800 million factory, expected to open in 2014.
The main issue now is that the Mexico’s steel industry is very far behind in comparison to the strength of Mexico’s automobile industry, meaning that steel producers have to quickly ensure that their steel is up to the standards and quantity demands. If they can manage that, there is no reason for automakers to import given the potential logistics and costs associated with importing.