Thursday, 30 November, 2000

Used Pickups Hot Sellers in Mexico

I drove from Austin to Harlingen, TX this evening after work.  Harlingen is in the lower Rio Grande Valley, and just about as far South as you can get in Texas.  On the way there I noticed at least two dozen cars or trucks towing used pickups; all headed South.  I'd made this trip before, and never saw anything like it.  What, I wondered, was going on?

It turns out that used pickups from the US are very popular in Mexico right now because in March the Mexican government temporarily lifted a ban on importing used trucks, and that ban is about to expire.  Or maybe has expired—it's hard to say and I've been unable to find much news coverage.  In any case, used pickups in the US are being sold at premium prices to Mexican buyers.  The Mexican government then charges $200 (US) to bring the truck into Mexico.  Having exhausted the supply in border towns, people are coming to San Antonio (a 4-hour drive from the border) to buy used trucks.

I would have thought that NAFTA would make this unnecessary.  And it will—eventually.  The restrictions, included in NAFTA, are there to "protect" the Mexican auto and truck industries, and eventually will be phased out.  Like most trade restrictions, the ban on auto imports hasn't resulted in significantly more sales of new Mexican-built cars.  Instead, it's resulted in higher prices for used cars and a booming auto theft industry in US border towns.  Cars are stolen in the US, smuggled into Mexico, and sold illegally to unwitting buyers who don't even know they're buying a stolen car.  It got so bad that last week the Mexican Senate passed a law allowing the legal registration of foreign cars manufactured between 1970 and 1993 that were brought into the country before Oct. 31.  They estimate that there are 1.5 million illegal (i.e. unregistered) used vehicles now being driven in the country.