Mexico is riding a boom in small-car sales that has put the nation's vehicle production on track to pass Canada for the first time and become the second-largest vehicle manufacturer in North America this year.*
There's more investment in small cars under way in Mexico. Ford Motor Co. will spend more than $3-billion (U.S.) in the biggest single automotive investment yet in the country, which will begin producing subcompact Ford Fiesta cars for North America in 2010.
GM is spending $650-million and hiring 2,000 workers to build its Chevrolet Aveo and Pontiac Wave subcompacts.
One major factor in Mexico's favour is labour costs, and the country is maintaining that edge with further wage reductions. Mexican workers agreed this month to a two-tier wage system that cuts hourly pay for newly hired workers to about half the current level of $4.50 an hour.