By Dudley Althaus and William Boston / Wall Street Journal
A barren patch in the rugged hills along the Tennessee River is a sign of how Mexico has accelerated past the U.S. South in the global competition for auto investment.
The tract of cleared woodland lies alongside a factory Volkswagen set out to build in 2008. But four years later, when Audi decided to move global production of its Q5 SUV to North America, the prize went to Mexico.
“Mexico had more than 40 different free-trade agreements,” said Rupert Stadler, Audi’s chief executive. The pacts give exporters from Mexico duty-free access to markets that contain 60% of the world’s economic output.
While the bulk of Mexico’s auto exports go to the U.S. and Canada, its partners in the North American Free Trade Agreement, auto makers increasingly are turning to Mexico as a platform for selling world-wide.