Automotive Site Selection in Small and Rural Communities
April 10, 2020
Site Selection Factors for the Automotive Industry
The U.S., Mexico, Canada Agreement (USMCA), for example, which has now higher local [requirements] content. So before, the local content for automotive projects was at about 62%, and now they raised it to 75%, which means you have to manufacture much more in the U.S. For example, Germans like to ship in the engine but that is a very large part [of the car]. So, the whole supply chain is changing. And then, with all the new agreements with China, for example, the tariff war going on, back and forth, how many tariffs are coming. And then also the threat with the European Union, will there be tariffs or not? … And then every month, [Mexico will get taxed] another 5% until they are at 25% and a lot of companies in the U.S. like, for example, Volkswagen and Mercedes and BMW, they ship in a lot of parts from Mexico because they have a lot of plants there, they have a lot of suppliers there. So that's a lot of trade going on between the borders. If that gets like to 25% that would be a high impact on the whole automotive industry.