Mexico is a land of great promise and always will remain so." That's the cynical quote often used to describe Mexico's roller coaster economy, which steadily rises and then plummets about every six years.
The latest rise/plunge occurred in 1993 as the Mexican government and other proponents of the North American Free Trade Agreement (NAFTA) painted an overly rosy picture of Mexico's economic strength, including predictions of annual Mexican vehicle production hitting 2 million units, with 700,000 exports by 2000. A burgeoning Mexican middle class and upper class was predicted to begin gobbling up vehicles and other goods at an exponential rate.
Then there was major political and economic unrest and the presidency changed hands. Combined domestic car and truck sales dropped from 624,000 units in 1994 to less than 189,000 in 1995, following a catastrophic devaluation of the peso at the end of 1994.
Domestic market sales have been rising steadily again since 1995's collapse, and the passage of NAFTA has helped Mexican factories streamline production, boost exports and become more attractive to automakers.
Mexico "has recovered solidly and continues to recover," says Mustafa G. Mohaterem,Corp.'s chief economist. "The Mexican government bit the bullet. Unlike some elements in Southeast Asia right now, Mexico did not seek a scapegoat, admitting that it was its own fault that policies became unbalanced."