Manufacturing in Mexico: a strategic move
The role of manufacturing in today’s globalized world is crucial; Therefore, it not only generates quality jobs, but also promotes the creation of supply chains, encourages innovation and contributes to the economic growth of a country.
By having a strong manufacturing industry, Mexico can diversify its economy and reduce its dependence on other sectors, such as oil. Furthermore, such activity can act as a magnet for foreign direct investment.
When a company decides to establish its operations in a country, it not only contributes to job creation, but also increases the transfer of knowledge and technology. This translates into a boost for local and regional development, generating a virtuous circle.
In the specific case of Mexico, manufacturing has proven to be an important pillar for economic development, managing to increase its competitiveness in the international market and allowing integration into global value chains, positioning it as a relevant player on the world stage.
Towards efficient manufacturing: overcoming obstacles in the production process
One of the most significant obstacles for the manufacturing industry is the increase in production costs in China in recent years, which has led many companies to look for new alternatives.
Another challenge is the trade war between China and the United States, as tariff measures and restrictive trade policies have led companies to reconsider their production strategies. Many have chosen to diversify their operations and look for alternative destinations, such as Mexico.
On the other hand, changes in regulations, volatility in financial markets and the lack of legal certainty have affected the planning and execution of manufacturing projects as well.
Mexico: the epicenter of competitive manufacturing
Faced with these challenges, Mexico is positioned as a strategic solution for companies seeking efficient manufacturing, below are some key reasons:
- In 2022, Mexico was the sixth largest country in the world in terms of manufacturing production.
- Mexico’s manufacturing exports represent around 30% of its total exports.
- Mexico is a major producer of automobiles, electronic products, plastic products and chemicals.
- Mexico is an attractive destination for manufacturing due to its low production costs. According to a study by the Organization for Economic Cooperation and Development (OECD), unit labor costs in Mexico are 30% lower than in the United States.
In this sense, Mexico has established itself as a viable alternative for those seeking a notable competitive advantage, because it offers:
Skilled labor in the country is more affordable compared to many other regions in the world, allowing companies to significantly reduce their production costs, generating a direct impact on profitability and competitiveness in the global market.
Likewise, it has extensive technical talent and qualified labor in various sectors. This guarantees high quality in production and greater efficiency in processes.
Proximity to key markets
The proximity of Mexico to the United States and Canada facilitates distribution and reduces transit times, which is essential for companies operating in North American markets.
Being in the same time zone and being able to offer fast, reliable deliveries to your customers in North America provides a significant competitive advantage to companies that choose to manufacture in Mexico.
Additionally, Mexico has favorable trade agreements such as the United States-Mexico-Canada Agreement (USMCA, formerly NAFTA), which provides preferential access to these markets and further facilitates commercial operations.
Flexibility and agility
Mexico stands out in this aspect thanks to its infrastructure and solid supplier network. These features enable rapid response to changes in demand and specific customer requirements.
Other benefits of manufacturing in Mexico
In addition to the advantages mentioned above, Mexico has an extensive logistics network that facilitates the import and export of products efficiently.
Not to mention, it has a modern and well-developed transportation infrastructure, including ports, airports, highways and railways, allowing for fast and reliable distribution.
Likewise, it has demonstrated a strong economy and stable political framework over the years, providing confidence to both domestic and foreign investors and creating a conducive environment for investment and business growth.
The Mexican government has even established a series of policies and programs to attract foreign investment and promote the competitiveness of the manufacturing industry. This includes tax incentives, training programs, support for research and development, and the creation of special economic zones.
Hand in hand: collaboration in manufacturing
Collaboration in manufacturing involves working hand in hand between different actors in a supply chain. This can include everything from input suppliers to manufacturers and distributors. The main objective is to optimize processes, reduce costs and maximize efficiency at each stage of production.
Mexico has the opportunity to become a reliable partner in this sense, as it has the infrastructure, the supply chain and the qualified workforce.
In addition, its strategic location facilitates operations. Companies can establish design and production centers in the country, and work closely with suppliers and customers in different regions of the world. This not only reduces response times, but also improves communication and decision making.
This strategy can also boost research and development of new products and technologies. By working as a team with other companies and experts, companies can share knowledge and experience, which can lead to the creation of innovative and competitive solutions.
Ready to optimize the manufacturing of your projects in Mexico?
In an increasingly competitive and dynamic business environment, it is essential that companies carefully evaluate their manufacturing options and seek opportunities that provide them with long-term competitive advantages.
Now that you know why manufacturing in Mexico is a smart choice that can make a difference in the success and growth of your business, are you ready to take advantage of this strategic move? Contact Us!