Why Auto Makers Are Building New Factories in Mexico, not the U.S.

Posted at 4:25 pm on 03/18/2015
‚ÄčAudi says that an array of free trade agreements favors Mexico over U.S. sites. Its not just the price of skilled labor that is attractive to Audi. If you think about a $50,000 car made in the U.S. that is then exported to Europe there is a 10% duty on that car. So thats $5000 in duties that Audi is paying. When that same car is made in Mexico there is no duty. This means with an already concentrated area of auto manufactures in Mexico, low cost skilled labor and free trade agreements it is a huge win for Audi and it will be easy to do business. No reinventing the wheel or stepping out alone as the only auto manufacture, Audi is simply following suit.  Here an article in the Wall Street Journal talking about Audi decision to change things up. 

http://www.wsj.com/article_email/why-auto-makers-are-building-new-factories-in-mexico-not-the-u-s-1426645802-lMyQjAxMTA1NTExODAxMjgwWj

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