Mexico is close to approving a plan to make funds available to carmakers struggling to keep their plants operating, according to the economy ministry.
Loans would be made through Mexico’s development bank, Nafinsa, and secured by accounts receivable, inventories and possibly assets such as land and machinery, the ministry said.
Bloomberg News noted that Mexico wants to slow the slide in the car and parts manufacturing sector which accounts for about 17% of the country’s output. The loans would be offered to all car manufacturers in Mexico.
The ministry said it was providing assistance with manufacturing rather than setting up a programme to boost car sales because the country imports 60% of its new vehicles – much of its local production is exported, primarily to the US. A spokesman told Bloomberg that stimulating the purchase of new vehicles would not have the same impact on production lines as in other countries.
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