Ford's hot Fusion sedan is produced in a big factory in Hermosillo, Mexico -- and that factory has recently been working around the clock to keep up with demand. Photo credit: Ford Motor Co.

Investors have watched with great interest as Ford (NYSE:F)General Motors (NYSE:GM)Volkswagen (NASDAQOTH:VWAGY) and other big names have poured billions into new factories in China. But there's another auto boom happening a lot closer to home: All three of those giants, and several others, are pouring funds into new factories in Mexico as well.

Nearly 3 million new vehicles were built in Mexico last year, a number that could rise substantially in years to come. What's driving this auto boom? As contributor John Rosevear explains in this video, Mexico's skilled, low-cost workforce -- and the North American Free Trade Agreement -- make the nation a great base for automakers looking to expand in the huge U.S. market.

Fool contributor John Rosevear owns shares of Ford and General Motors. You can connect with him on Twitter at @jrosevearThe Motley Fool recommends BMW, Ford, and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.