The automotive industry in Mexico: A success story under pressure

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In its long history, the Mexican motor vehicle industry has gone through periods of both boom and rapid growth and of deep crises that forced a reassessment of the goals and strategies of public policy and private investment. Merely a decade after its solid performance in the 1960s, the sector was seen to portray everything that was wrong with Mexico’s development. In particular, it was considered one of the main culprits of the manufacturing sector’s trade deficit and an example of a truncated form of industrialization, characterized by the assembly of end products with no carry-over to intermediate inputs or capital goods, the true bearers of technological progress. In some cases the industry was deemed an example of Latin America’s “showcase modernization” (Fajnzylber, 1983). At the heart of the problem was a proliferation of different models which led to a fragmented production structure that prevented the industry from achieving a scale that could lead to reasonable levels of profitability without protectionist measures.

Related Subject(s): International Trade and Finance
Sustainable Development Goals:
Countries: Mexico
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