Manufacturing in Mexico: Global Hot Spot for New Operations Megan Richford - NAPS
go to original December 11, 2012

Mexico manufacturing is increasingly becoming an attractive option for global businesses looking to make their manufacturing operations more effective and efficient. Traditionally, the Asian market, specifically China, has been the locale of choice for CEO’s and VP’s of manufacturing who are looking to maximize profits by utilizing lower cost labor and production overseas.

However, there does not seem to be a slowdown in the rising cost of production abroad and many companies are relocating their manufacturing facilities from China to Mexico.

Honda, Mazda, Nissan and Audi are all expanding into central Mexico where 75 percent of all automotive assembly already takes place. Automotive parts, hi-tech engines, and high-end tires are some of the major components being made in the region because of the advantages of manufacturing in Mexico. Let’s examine some.

• The Guanajuato Industrial Corridor enjoys close proximity to Mexican industrial and U.S. commercial centers. Logistically, distribution to the western U.S. and Asia is much easier.

• Mexico’s infrastructure has evolved into a modern network of railways, airports and highways, which allows companies to put more confidence in the shipment of end products to consumers and also lowers carrying costs by using just-in-time principles, a value-added benefit.

• Manufacturing facilities and communication systems have been upgraded in the country with state-of-the-art technology, which has resulted in the latest in computer innovation and faster electronic communication.

• Mexico has a ready force of educated workers to aid in IT support and consulting, which ensures that daily business functions are carried out smoothly. Bilingual call centers have already been set up to service the needs of any operation.

• Packaging in Mexico is a supply chain trend that maximizes profits by decreasing costs. Goods, like electronics for instance, are purchased in bulk from the manufacturer then packaged for retail sale in Mexico. Shipping this way costs less, is faster, and is a more flexible mode of production that is better able to respond to changing market demands and custom ordering. Not to mention, the North American Free Trade Agreement mandates that goods are shipped into Mexico duty-free, including no tax on labor or packaging.

With over 20 years of experience doing business in Mexico, NAPS can provide expert commentary on trends and changes in the industry. NAPS offers administrative support services for companies manufacturing in Mexico. Administrative services include: Site Selection, HR, Recruitment, Accounting, Payroll, Customs, Environmental and Corporate Compliance. For more information visit the website.

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