Clunkers and cash along the U.S.-Mexico border

carstjI have always been fascinated with how the car industry operates along the border. You have maquiladora factories set up in Mexico that piece together cars for export to the U.S. Meanwhile, cars that are stolen in the United States – particularly in U.S. border cities – often end up in Mexico. And, get this: Cars from the U.S. are sold legitimately in Mexico, but end up being stolen from their Mexican owners, crossed into the United States and re-sold in the U.S. market. 

So, with the U.S. car industry making a lot of news lately, I started wondering about what might be going on in Mexico in light of the slowdown in demand for new cars in the United States.

In the Mexican border city of Reynosa, where about 50 of 170 factories cater to the auto industry,  the slowdown has apparently forced some car factories to halt production about 40 percent, according to this article in the South Padre Island Breeze. Meanwhile, Mexico’s El Universal, reported last month that  president Felipe Calderon announced Mexico’s own  “cash for clunkers” program to promote that country’s internal car manufacturing market. People who turn in cars that are at least 10 years old will receive roughly $1,150 towards a new car that is not worth more than about $12,300. The country is setting aside about $40 million for the program, according to the article.

And this Los Angeles Times story about the “cash for clunker” program in the United States benefitting dismantler and scrap recyclers is bound to resonate with the dozens of junkyards located in the Otay Mesa area of San Diego, which have a brisk cross-border clientele.

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