Mexico offers a multitude of advantages as a manufacturing center for foreign companies. This is why numerous businesses seek to partner with an ally who can help them leverage all the benefits that the country provides.
However, once the advantages of manufacturing in Mexico are recognized by those looking to outsource manufacturing processes and market their products from this country, many other questions arise. For example: How to start with manufacturing operations in Mexico? What concrete steps need to be followed? What does this investment entail?
When considering manufacturing in Mexico as a strategic option for a company’s supply chain, many factors must be assessed.
Mexico has established itself as a global leader in manufacturing, attracting companies from diverse industries worldwide. Why? Its proximity to the United States, a skilled workforce, and trade agreements like the United States-Mexico-Canada Agreement (USMCA) make it an ideal place to establish manufacturing operations in Mexico.
Why Choose Mexico for Manufacturing?
Setting up a factory in Mexico offers numerous benefits that position the country as a competitive manufacturing hub. Companies looking to reduce production costs while maintaining high-quality standards will find that factories in Mexico offer an excellent balance between cost-efficiency and operational effectiveness.
One of the most compelling reasons to establish manufacturing Mexico is access to key markets. Its geographical location provides logistical advantages for product distribution, particularly to the United States, Mexico’s largest trading partner. Additionally, the country has numerous trade agreements with different regions worldwide, facilitating the flow of goods and raw materials for manufacturing operations in Mexico.
The Competitive Advantage of the Mexican Labor Market
Manufacturers in Mexico benefit from a highly skilled and affordable workforce. Mexico has a robust educational system, especially in areas related to engineering and technical skills, giving companies access to well-trained workers.
This talent pool is particularly valuable in high-tech industries such as aerospace, automotive, and electronics, where precision and experience are crucial.
Moreover, labor costs in Mexico are significantly lower than in countries like the United States or Canada, allowing factories in Mexico to maintain competitive prices while ensuring high-quality production.
It is worth noting that, despite these lower labor costs, Mexico has avoided many of the issues faced by other low-cost manufacturing countries, such as poor working conditions or low-quality products, making it a preferred choice for manufacturing in Mexico.
Key Industries in Mexico’s Manufacturing Sector
Mexico has a diverse economy with a wide range of industries supported by Mexico factories. Some of the most prominent sectors include:
Automotive Manufacturing
Mexico is the fourth-largest vehicle exporter worldwide. Numerous international automotive manufacturers in Mexico operate factories in Mexico, taking advantage of the skilled workforce and proximity to the U.S. market.
Aerospace Industry
The aerospace sector in Mexico has grown significantly in the last decade, becoming a high-tech manufacturing Mexico center. With over 300 aerospace companies operating in the country, Mexico has become a key player in the global supply chain for aerospace parts and components.
Electronics Manufacturing
The electronics sector is another area where Mexico manufacturing thrives. Mexico is a leading exporter of flat-screen televisions and other electronic products, thanks to its expertise in this industry.
Medical Device Manufacturing
Mexico is home to numerous manufacturers in Mexico specializing in medical device production. These manufacturers are recognized for meeting strict international standards, exporting to markets such as the United States, Europe, and beyond.
Steps to Establish a Factory in Mexico
For companies considering setting up manufacturing operations in Mexico, here are some key steps to consider:
Selecting the Right Location
Mexico has several ideal regions for Mexico manufacturing, depending on the industry. Northern states, such as Baja California, Nuevo León, and Chihuahua, are known for their proximity to the U.S. and high-tech industry concentration. Meanwhile, central states like Querétaro and Guanajuato are popular for the aerospace and automotive sectors.
Understanding the Regulatory Environment
The Mexican government has implemented policies to facilitate the operation of Mexico factories by foreign companies. However, understanding local labor laws, environmental regulations, and tax incentives is crucial. Many companies choose to work with local legal advisors to ensure compliance with all regulations.
Hiring Skilled Labor
As mentioned earlier, Mexico has a wealth of talent available for manufacturing in Mexico. Partnering with local recruitment agencies or directly hiring from technical schools can help build a team with the skills needed for successful manufacturing operations in Mexico.
Leveraging Trade Agreements
One of the greatest benefits of manufacturing in Mexico is access to international markets through trade agreements. The USMCA allows for tariff-free exports to the United States and Canada, while Mexico’s agreements with the European Union, Japan, and several Latin American countries open doors to other key markets.
Cost Savings and Efficiency in Mexican Manufacturing
When companies decide to relocate their production facilities or establish a factory Mexico, it is often due to significant cost savings. Factories in Mexico are known for their cost-effectiveness, with savings derived from lower labor costs, cheaper real estate, and reduced shipping expenses due to proximity to the United States.
Additionally, manufacturers in Mexico benefit from a well-developed infrastructure, including an extensive network of roads, ports, and railways that support efficient goods transportation. This infrastructure enables faster delivery times and lower shipping costs, making manufacturing in Mexico an attractive option for companies looking to optimize their supply chain operations.
How Shelmex Supports Manufacturing in Mexico
At Shelmex, we have decades of experience helping companies establish and optimize their manufacturing operations in Mexico. Our expertise spans various industries, and we offer customized solutions for each client, whether they need assistance with the initial setup of a factory in Mexico or ongoing support to maximize efficiency and cost savings.
We offer a wide range of services, from site selection to regulatory and legal compliance, workforce recruitment, and supply chain management. Our goal is to ensure our clients can focus on their core business operations while we handle the complexities of setting up and maintaining factories in Mexico.
Additionally, Shelmex understands the importance of staying at the forefront of industrial trends. That is why we continuously invest in new technologies and innovations to help our clients remain competitive in the global market. From advanced automation systems to sustainable manufacturing practices, Shelmex leads in manufacturing Mexico, ensuring that our clients receive the highest level of service and expertise.