Industries Manufacturing in Mexico
Manufacturing in Mexico continues to grow across most industries, both in size and sophistication. In fact, Mexico is the 12th largest exporter in the world.
Industries Manufacturing in Mexico
Manufacturing in Mexico continues to grow across most industries, both in size and sophistication. In fact, Mexico is the 12th largest exporter in the world.
Respective governments have streamlined certain regulations which allow businesses to establish operations in Mexico with little difficulty. Furthermore, preferential tariffs and free trade agreements, such as the USMCA, have forged comparable production costs with an efficient infrastructure for transporting goods with little to no tariffs.
Mexico’s Labor Force
There are many benefits to manufacturing in Mexico. First, companies in Mexico will often see reduced labor costs relative to their operations outside of the country. Mexico’s large and diversified labor pool continues to grow across most manufacturing industries, both in size and sophistication. Mexico’s large, diversified labor pool and its proximity to the United States, coupled with wage and transportation inflation in China, is driving the largest Mexico manufacturing expansion over the past 30 years. There is now a highly skilled and educated workforce that can excel in all the major industries in Mexico.
Mexico’s Labor Force
There are many benefits to manufacturing in Mexico. First, companies in Mexico will often see reduced labor costs relative to their operations outside of the country. Mexico’s large and diversified labor pool continues to grow across most manufacturing industries, both in size and sophistication. Mexico’s large, diversified labor pool and its proximity to the United States, coupled with wage and transportation inflation in China, is driving the largest Mexico manufacturing expansion over the past 30 years. There is now a highly skilled and educated workforce that can excel in all the major industries in Mexico.
Major Manufacturing Industries in Mexico
Although many industries are moving their manufacturing to Mexico, the most prominent industries in Mexico are the automotive, aviation and aerospace, medical device, apparel and textile, and consumer products industries.
Major Manufacturing Industries in Mexico
Although many industries are moving their manufacturing to Mexico, the most prominent industries in Mexico are the automotive, aviation and aerospace, medical device, apparel and textile, and consumer products industries.
Mexico Automotive Industry
The automotive manufacturing industry in Mexico has played a crucial role in the economy over the past decade, attracting some of the world’s largest assemblers, including Fiat Chrysler, Ford, GM, and Toyota to name a few. Mexico is also South America’s largest automotive manufacturer, with an annual production of close to 4,000,000 units. It is estimated that 82% of these units are exported.
At the most recent Automotive Logistics Mexico conference, the executive president of the Asociación Mexicana de la Industria Automotriz (AMIA), Eduardo Solis, reported that the automotive manufacturing industry had been “growing significantly,” as it now represents 20.2% of the nation’s GDP, second only to the food industry at 20.7%. Furthermore, Solis claimed that net revenue for the Mexican automotive industry is set to surpass $100 billion.
Aviation and Aerospace Manufacturing Industry in Mexico
In the late sixties, the Mexican Government’s Maquiladora Export Program (now known as the IMMEX Program) began laying the foundation for this industry. It is mostly responsible for expanding industrialization, employment opportunities and most importantly, allowing the importation of goods to be assembled and exported without import duties or taxes. Aerospace companies have taken advantage of these manufacturing opportunities in Mexico.
The aerospace manufacturing industry in Mexico is a top-performing sector and an excellent example of overall growth, according to trade.gov:
Medical Device Manufacturing Industry
A ProMexico 2018 report has revealed that the medical device manufacturing industry in Mexico continues to experience favorable growth. Over the past few decades, some 641 medical device manufacturing companies have leveraged nearshore operations along the U.S./Mexico border regions, which is responsible for adding around 156,831 to the workforce and over $9.05 billion annually in exports.
Apparel & Textile Manufacturing Industry
As Mexico’s fourth-largest manufacturing industry, apparel/clothing and textile manufacturing accounts for 3.7% (1.3% in textiles and 2.4% in apparel) of Mexico’s manufacturing GDP.
Learn more about Mexico’s textile industry and their clothing manufacturing industry.
Consumer Product Manufacturing
Many consumer products companies have moved their manufacturing operations to Mexico now, as well. As manufacturing costs continue to rise in China, manufacturers are moving their operations to Mexico for a variety of cost-efficient reasons. This also includes electronics manufacturing.
Consumer product manufacturers have also seen the value in establishing shelter corporations and leveraging the IMMEX Program (formerly known as the Maquiladora Program) which allows for duty-free importation of raw materials.
Gone is the day of only simple assembly and low-tech manufacturing in Mexico. Now, the country is attracting large, multinational manufacturers from virtually every industry. Industries in Mexico now vary across all sectors of business. In fact, Tijuana, Mexico in Baja California now claims the largest concentration of medical device manufacturers in all of North America, and Mexico is now the fourth largest producer of automobiles in the world.
Regardless of your company’s size, industry or level of sophistication, NAPS can help determine if manufacturing in Mexico is a good fit for your organization through the development of a detailed financial, operational and logistical feasibility study.
Mexico Automotive Industry
The automotive manufacturing industry in Mexico has played a crucial role in the economy over the past decade, attracting some of the world’s largest assemblers, including Fiat Chrysler, Ford, GM, and Toyota to name a few. Mexico is also South America’s largest automotive manufacturer, with an annual production of close to 4,000,000 units. It is estimated that 82% of these units are exported.
At the most recent Automotive Logistics Mexico conference, the executive president of the Asociación Mexicana de la Industria Automotriz (AMIA), Eduardo Solis, reported that the automotive manufacturing industry had been “growing significantly,” as it now represents 20.2% of the nation’s GDP, second only to the food industry at 20.7%. Furthermore, Solis claimed that net revenue for the Mexican automotive industry is set to surpass $100 billion.
- Mexico ranks as the sixth-largest passenger vehicle manufacturer in the world, producing roughly 5 million vehicles each year—a number that’s only growing
- The automotive sector in Mexico is a major market for the U.S., employing over one million people in the nation.
- A Forbes survey reported that “the majority of automotive executives (78%) feel that the changes required by USMCA will have a positive impact on their individual companies in the long term, and more than half (53%) feel USMCA will ultimately increase North American vehicle manufacturing and provide a net improvement for workers and consumers.”
- A requirement in the USMCA is that 75% of the content of a vehicle must be manufactured in North America and that core auto parts must come from Mexico, Canada, or the United States.
- These requirements set forth by the USMCA in regards to the automotive industry are likely to expand and create more business opportunities in the U.S. for exporters and in Mexico for suppliers.
Aviation and Aerospace Manufacturing Industry in Mexico
In the late sixties, the Mexican Government’s Maquiladora Export Program (now known as the IMMEX Program) began laying the foundation for this industry. It is mostly responsible for expanding industrialization, employment opportunities and most importantly, allowing the importation of goods to be assembled and exported without import duties or taxes. Aerospace companies have taken advantage of these manufacturing opportunities in Mexico.
The aerospace manufacturing industry in Mexico is a top-performing sector and an excellent example of overall growth, according to trade.gov:
- From 2013 – 2015, there was a reported 20% average annual export growth
- This led to 63,000 jobs created in 2016
- Accumulated direct foreign investment from 2007–2017 is upward of $6 billion
- Aerospace firms grew from 112 in 2009 to 330 in 2017
- The Mexican Government launched various programs to create employment opportunities, including business incentives, new workforce training programs, and new universities
- The increase in global demand for new aircraft and maintenance services post COVID-19 has projected a positive future for this industry.
Medical Device Manufacturing Industry
A ProMexico 2018 report has revealed that the medical device manufacturing industry in Mexico continues to experience favorable growth. Over the past few decades, some 641 medical device manufacturing companies have leveraged nearshore operations along the U.S./Mexico border regions, which is responsible for adding around 156,831 to the workforce and over $9.05 billion annually in exports.
Factors that contribute to this industry’s growth include:
- A highly-trained and educated workforce
- Academic, government and private sector collaborations expand device manufacturing and improve efficiency
- Proximity to the U.S. provides several cost-effective benefits over other global locations like China
Apparel & Textile Manufacturing Industry
As Mexico’s fourth-largest manufacturing industry, apparel/clothing and textile manufacturing accounts for 3.7% (1.3% in textiles and 2.4% in apparel) of Mexico’s manufacturing GDP.
Learn more about Mexico’s textile industry and their clothing manufacturing industry.
Factors that contribute to this industry’s growth include:
- The U.S. Department of Commerce has reported that textile manufacturers have modernized their facilities, and are looking to expand into automotive and industrial fabrics
- Volkswagen, Mercedes Benz, BMW and others are getting automobile filters, airbags, seat covers, doors, bands and cables manufactured by upgraded textile facilities in Puebla, Mexico
Consumer Product Manufacturing
Many consumer products companies have moved their manufacturing operations to Mexico now, as well. As manufacturing costs continue to rise in China, manufacturers are moving their operations to Mexico for a variety of cost-efficient reasons. This also includes electronics manufacturing.
Consumer product manufacturers have also seen the value in establishing shelter corporations and leveraging the IMMEX Program (formerly known as the Maquiladora Program) which allows for duty-free importation of raw materials.
- Electronic manufacturing of consumer goods is on the rise as there is an increase of available engineers and design specialists
- In 2015, the U.S. Bureau of Labor Standards (BLS) reported that the U.S. consumer goods market was the largest in the world at $446 billion
Gone is the day of only simple assembly and low-tech manufacturing in Mexico. Now, the country is attracting large, multinational manufacturers from virtually every industry. Industries in Mexico now vary across all sectors of business. In fact, Tijuana, Mexico in Baja California now claims the largest concentration of medical device manufacturers in all of North America, and Mexico is now the fourth largest producer of automobiles in the world.
Regardless of your company’s size, industry or level of sophistication, NAPS can help determine if manufacturing in Mexico is a good fit for your organization through the development of a detailed financial, operational and logistical feasibility study.
