Tag Archives: automobiles

Could Mexico grow bigger than Brazil in the next few decades?

What if Mexico were to become a bigger economy than Brazil?

In recent years Brazil has outplayed Mexico, growing at 6% or more as Mexico bumped along in the slow lane. But lately that has changed. Last year Mexico grew by 4% and Brazil by 2.7%. This year Mexico is expected to get close to 4% again, whereas some economists reckon that Brazil’s rate could dip below 2%. A recent report by Nomura predicted that Mexico’s economy, currently half the size of Brazil’s, could end up the bigger of the two within the next decade. – The Economist

To get into some detail, in 2011 Mexico had a GDP of $1.15 trillion and Brazil with $2.48 trillion. It seems like a tall order for Mexico to more than double its economy.

 

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But, if you look at certain sectors, like automobiles, Brazil is starting to face some growth problems. Originally, the country grew by exploiting is size, natural resources, and population. In order to keep up growth they will need to expand internationally with products and services.

Last year, Brazilians created 3.4 million cars and exported only 540,000. That is worth $372 million.  Mexico, on the other hand, created 2.6 million cars and exported 2.1 million of them. That is worth $2 billion and reflects a growth of 40%. (The Economist)

Mexico may be more ideally situated for growth in the next few decades than Brazil is.