Meanwhile in Mexico, Gas Price Hikes Lead to Riots While Auto Manufacturing Fight Blasts the Peso
Lately, for automotive news outlets, it seems most of the stories regarding Mexico are primarily focused on this side of the border.
Most specifically seem concerned with the effects (or lack thereof) that our dear president-elect is having on automaker production decisions, like Ford abandoning its new construction investments in Mexico (although its small car production, which was the original source of president-elect Trump’s ire, is still moving to Mexico as planned), or Toyota’s announced investments in the US following a somewhat threatening tweet (although that seems to just be Toyota’s usual US investment).
However, here is a little reminder of how things are going in Mexico.
Marches, highway blockages, and rioting have swept across our southern neighbor as the government raised the prices on gasoline by as much as 20% in some places (keep in mind that the government currently controls the only gas station company in town, Pemex).
This move was defended by Mexican President Enrique Peña Nieto, who took to national television to give a statement in which he argued that the country is dependent on imported oil, and with international prices rising, the government has to increase prices. This is also part of an effort by the government to end the gas monopoly and attract foreign investors.
This statement wasn’t met very kindly, though. The Mexican economy has taken hits each time president-elect Trump criticizes the auto industry in Mexico, with the Mexican peso hitting record lows after he criticized GM and Ford cancelled its plans, and then again after his tweet critique of Toyota. And, to put a cherry on top of that and President Nieto’s waning popularity, legislators receive vouchers to pay for their gasoline.
If things continue as they are, the situation seems likely to get continue to worsen for Mexico.