Mexico's Appetite for Used Cars from US Sparks Fight Tim Johnson - Tribune News Service
go to original March 14, 2015

Every day, Mexico's muscular automotive industry churns out thousands of shiny new vehicles and puts them on rail cars to cross the border bound for U.S. showrooms.

Every day, similar traffic rolls in the other direction: thousands of used cars.

Those two traffic flows have set off a battle in Mexico that has spiraled into a fight over patriotism and global warming, with arguments laden with phrases like "junkyard cars" and "garbage vehicles."

At issue is that despite Mexico's powerful and surging auto industry, the domestic market for new cars is surprisingly weak. What is robust in Mexico is the market for used cars. Auto brokers every day sweep up more than 1,000 discarded or partially wrecked vehicles at U.S. auctions and bring them back across the border to be sold at used car lots.

The battle over the imports has escalated to extraordinary levels. Border crossings have been shut. Mexico's Supreme Court has been dragged into the dispute, and at least two judges are under investigation for issuing rulings — perhaps lubed by payoffs — that favored used car dealers.

There are charges and countercharges. The new car industry claims the flood of used cars contributes to greenhouse gases, endangers drivers who aren't notified of safety recalls and unfairly depresses the price of used cars in Mexico. The used car industry claims its popularity is because of tight credit rules and sky-high interest rates that put the purchase of new cars out of reach of the majority of Mexicans.

Read the rest at The Ledger

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