Mexico's Auto Production Rebounds Sharply

The Mexican automotive sector, which has been heavily dependent on international demand, is showing signs of a significant recovery after a slump last year. According to Alejandro Werner, the country's deputy finance secretary, auto production in Mexico has experienced growth, putting the country's manufacturing sector back on par with pre-recession levels. This is a positive indicator for the Mexican economy, which contracted by 6.5 percent in 2009, its worst performance in nearly 80 years.

Key Takeaways:

• Auto production in Mexico rebounded sharply, reaching levels not seen since the third quarter of 2008, prior to the collapse in auto demand.
• The Mexican economy, led by the automotive industry, contracted in 2009 by 6.5 percent, its worst performance in nearly 80 years.
• Alejandro Werner, the country's deputy finance secretary, stated that authorities in Mexico are "seeing such a strong (economic) rebound that growth is going to be very dynamic" this year.
• Mexico's manufacturing sector has experienced growth rates of 7-8 percent over the past six months and 6 percent in the industrial sector.
• A "recovery in formal employment" began in the second half of 2009 and is expected to continue in the first half of 2010, led by the export sector.
• Investment in Mexico is beginning to recover, as is consumer spending.
• The government is forecasting that the Mexican economy will grow by between 5 percent and 6 percent in 2010.

Statistics:

• 6.5 percent: contraction in the Mexican economy in 2009
• 7-8 percent: growth rate in the manufacturing sector over the past six months
• 6 percent: growth rate in the industrial sector
• 5-6 percent: forecasted growth rate for the Mexican economy in 2010
• 32.4 percent: fall in demand for new vehicles in North America as compared to 2007

Sources:

• EFE (Latin American news agency) via COMTEX
• Latin Finance magazine at the Inter-American Development Bank's Annual Assembly