ABSTRACT
As in Canada, in Mexico the lack of efficient, indigenous vehicle assemblers and the small market for automotive products created structural barriers for the development of a national automotive industry under mass production. In contrast to the Canadian case, Mexico’s goal was not only to develop an auto industry but to develop an independent one, owned by Mexicans. This goal fashioned a fundamental conflict with the US auto makers that wanted to have full control of their operations there. The 1960s industry context of heightened levels of oligopolistic competition at the worldwide level, however, acted in favor of the Mexican government, which was able to attract automotive investments through import substitution policies and a nationalistic approach. Since it was the leader, Ford played a key role in encouraging other auto makers to comply with Mexico’s requirements. Ford’s positive reaction to the Mexican government’s demands to assist in the development of an auto parts sector also stemmed from the parent company’s strategy of gaining first-mover advantages abroad, in order to compete with GM.
