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Automotive sector drives December trade surplus in Mexico

Small stacks of gold pesos representing the revenue that the manufacturing sector has brought to Mexico.
30 Jan 2015

Manufacturing in Mexico by foreign companies has provided the country with a substantial source of revenue over the years. According to a report from The Wall Street Journal, the automotive sector - driven by demand from the U.S. - has contributed greatly to the country's economy, which experienced a 2.2 percent growth last year.

"The United States by far continues to be our premier export market," Eduardo Solis, executive director of the Mexican Automotive Industry Association, told the newspaper.

Between January and November of last year, as many as 3 million cars and trucks were produced in the country, with eight of every 10 vehicles manufactured in the country being shipped out. This amounts to approximately 2.4 million vehicles, with 10 percent being sent to Canada and 72 percent to the U.S.

A robotic arm within a manufacturing facility in Mexico works to operate on the frame of an automotive vehicle.The growth of Mexico's automotive manufacturing sector has allowed the country to drive more revenue from trade.

"Between January and November of last year, as many as 3 million cars and trucks were produced in the country."

Auto manufacturers already doing business in Mexico have planned to invest more than $7 billion, mostly toward the construction of new production facilities, such as assembly plants, the Journal reported in a separate article. In addition, organizations that supply the necessary materials needed to make cars and other vehicles - such as metal and aluminum - will also invest billions to expand their operations.

All told, the Journal wrote that Mexico saw a trade surplus in December 2014 of $254 million, citing data from the National Statistics Institute. Overall, Mexico grossed nearly $800 billion for the year as a result of its trade activity. This was good news as the country's energy exports - specifically petroleum - saw a decrease of 43.7 percent in 2014 due to the rapidly falling prices of crude oil which dipped to $52.37 per barrel in December, down significantly from November when the cost was $71.64.

With auto manufacturing continuing to trend upward, any declines in energy exports will be offset by the revenue generated from the assembly of new vehicles, putting Mexico in a good position to continue experiencing financial growth.

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