Japan has traditionally ranked among the top two auto exporters to the U.S. since the 1970s, but that is about to change this year, when Mexico is tipped to take Japan’s place as the No. 2 auto exporter to the United States.

It’s an interesting development, considering that Mexico exported fewer than 250,000 units to the U.S. in 1990. According to an estimate from IHS Automotive, made-in-Mexico cars sold in the U.S. will reach 1.69 million this year, topping the 1.51 million Japan-built vehicles. Furthermore, IHS Automotive even forecasts that by 2015, Mexico will also top Canada as the biggest car exporter to the United States, with 1.9 million units versus 1.87 million.

From 1993 to 2013, Mexican auto exports to the U.S. more than quadrupled as output almost tripled, boosted by lower tariffs made possible by the North American Free Trade Agreement (NAFTA).

Many automakers have opened plants in Mexico and the trend continues, with the country seeing three plant openings in four months, from Nissan, Honda and Mazda. The three new plants alone will boost Mexico’s annual auto capacity by about 600,000 vehicles during the next several years.

The decline of exports from Japan, which as recently as 2008 shipped almost twice as many cars to U.S. consumers, is due to the fact that Japanese carmakers opened new plants both in the U.S. and in Mexico and increased production at their North American facilities.

This is obviously good news for the Mexican economy, where exports of cars, trucks and parts made up 19 percent of all Mexican exports during the first 10 months of 2013, up from 17 percent in 2012.

By Dan Mihalascu

Story References: Bloomberg

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