The automotive industry: Technological change and sourcing from Mexico

The purpose of this paper is to review trends of the automotive industry in an international context and assess their impact on the Mexican automotive industry. The effect of technological transformations on the international location of production and the extent to which export potentials from Mexico should or could remain associated with domestic market achievements are two major concerns. A proper and realistic assessment of these issues from a Mexican perspective first requires delving into their implications for the U.S. auto industry and into the U.S. official policy for the automobile sector. At the end of the article, some suggestions are offered for long-term policies that will assist the development of the Mexican industry and will emphasize the need to anticipate technological changes and choose better-suited foreign partners.