That's allowed U.S., Japanese, and European car companies to turn Mexico into an export platform for some of the world's hottest new cars. DaimlerChrysler's new PT Cruiser is made only in Toluca, outside Mexico City. General Motors Corp. is assembling the Pontiac Aztek sport-utility vehicle exclusively in Ramos Arizpe, near Monterrey. Production of Nissan's New Sentra is centralized in Aguascalientes. Fifteen years ago, it would have been unthinkable for auto makers to have so much confidence in Mexico that they could make it the pioneer launching facility for a new product,'' says Scott Martin, a professor at Sarah Lawrence College who tracks the auto industry in Latin America.
Exports are only half the story, though.
Auto makers are also targeting the potentially huge local market. The region has a population of more than 400 million. And the ratio of people to cars on the road is 9 to 1, compared with 2 to 1 in developed countries. One of the most interesting trends is the level of experimentation taking place, particularly in Brazil and Mexico. These countries have become convenient testing grounds for innovative production processes, such as modular assembly and lean manufacturing, which shave hours off the time it takes to build a new vehicle.