Nissan Motor Company, which makes its Sentra car in Mexico right now, is now thinking of shifting it to America according to the news. I was a little surprised to hear this news, because Mexico has been a cheap and convenient place for automobile companies. Nevertheless, this decision is understood in view of the changes in global market and politics. In this essay, I will give my opinion on the reason behind this change, its advantages and losses, and a little bit of its impact.
Making Sentra in Mexico has always been a profitable deal for Nissan. There is cheap wages there, and it is easy to send cars without paying more taxes to the US due to business agreements like NAFTA. A friend of mine, who works in the automobile industry, told how suitable Mexico factories are for the US market. But now the situation is changing. In the US, the enthusiasm about "Made in USA" is increasing, and the government is also giving greed like tax exemption. In such a situation, it is not surprising to take this step of Nissan.
Read Also: Ranger Raptor in Australia gets 750-horsepower Coyote V-8 power
Reports say that Nissan's decision is affected by many things. First, the USMCA agreement, which is the new version of the old NAFTA, has brought strict rules for local materials and production. Second, American customers are now liking domestic cars more. I think it can also brighten the image of the brand. But I also feel that Nissan will not find it so easy. The cost in the US is high, and setting up new plants or upgrading the old men is not a small expense.
There are many obstacles in the path of this shift. One is that wages and operational costs in America are more than Mexico. This may increase the price of Sentra, and customers may have to loose pockets. Secondly, this bad news can be for thousands of people in Mexico who work in Nissan factories. One of my relatives, who live in Mexico, used to say that the local economy there is very dependent on the auto industry. If Nissan moves from there, many families may have an impact on livelihood.
Read Also: Toyota introduces new "Wave Maker" color for 2025 TRD Pro
Shifting production in America will benefit the economy there. Jobs will grow, and the slogan of "Made in USA" will be stronger. But this can be harmful for Mexico. Also, the supply chain can also create turmoil, because parts coming from Mexico will now have to manage in America. I remember, a few years ago when another company did this, there were problems in their production for several months. Nissan will have to take very thoughtful steps this time.
In the end, I believe that this decision of Nissan shows the reality of today's global market. Costs, politics, and customers' choice - all together forces companies to take such big decisions. If Nissan shifts it, it will be a big change not only for him, but for the entire automobile industry. But for this, he will have to manage the cost and challenges well. Otherwise, as my grandfather used to say, "The decision taken in a hurry sometimes gets overshadowed."