Mexico Ramps Up Car Exports

Mexico, which was the world's ninth-largest auto exporter in 2006, now ranks fourth behind Germany, Japan and South Korea, The Wall Street Journal reports.

Mexico is expected to export 2.14 million vehicles this year, up 78% in the past three years, according to the country's carmaker group AMIA. One in 10 cars and light trucks sold in the U.S. last year was made south of the border.

Mexico's lower costs, skilled workforce and favorable exchange rate are attracting new auto plants, the newspaper notes. This year such carmakers as Daimler, Fiat, General Motors, Honda, Mazda, Nissan and Volkswagen announced new or expanded factories there.

Mexico is especially popular for production of small cars, whose narrow profit margins make limiting expenses imperative, the Journal notes. It says wages for the country's assembly line workers starts at $40 per week, well below American minimum wage.

Mexico has an established supplier base and transportation infrastructure. The country also boasts proximity to the large U.S. and South American markets and trade agreements with 44 countries, including Japan and the members of the European Union.