Three Leading Sectors Benefiting from Manufacturing in Mexico
10.20.23Mexico has been a manufacturing leader but has recently surpassed China as the top trade partner with the U.S. Due to a solidly built infrastructure and thriving industrial workforce, U.S. and other foreign manufacturers expanding their operations can depend on the blueprint that Mexico has in place.
For decades, Mexico has invested its resources into manufacturing education and training to advance the skill sets of its workforce and create a hub of employee availability for some of the world’s largest manufacturing companies. Additionally, the unique advantage of implementing shelter services in Mexico is effective in delivering long-term success
Many global companies continue to invest in Mexico manufacturing, and new U.S. operators are considering nearshoring for the first time. Though there are established industrial hubs set up throughout the country, there are a few leading sectors that have driven manufacturing in Mexico to where it is today.
1. Aerospace Manufacturing
Spanning across five major hubs throughout Mexico, aerospace manufacturing continues to be one of the country’s main sectors. Over the past 20 years, the number of aerospace manufacturing firms has grown over triple in size. 80 aerospace firms alone are set up in Baja California which supports 37,000 direct jobs.
Due to the range of capabilities – from producing components and harnesses to manufacturing airframes and small drones – manufacturing in Mexico has become a go-to strategy. GE, Rolls Royce, Honeywell Aerospace, and GKN Aerospace are among the many global brands that depend on Mexico to manufacture their turbine systems and jet wings, respectively. With such a strong infrastructure already in place, it makes it easier for companies newly entering the space to get up and running more quickly.
2. Automotive Components
Nearly every global automotive manufacturer has a presence in Mexico. By 2022, Mexico became the fourth largest automotive parts producer in the world, exporting nearly $38 billion worldwide. It has become the central manufacturing hub for automotive components, much of it due to the new provisions set forth by the USMCA.
With 75% of cars and light trucks required to be produced in North America, it makes sense for U.S. manufacturers to consider manufacturing in Mexico over continuing production in China. There are already multiple factories set up throughout the country, spanning 11 automotive clusters. Tesla is among one of the many global companies that have recently announced expansion. It has chosen Monterrey for its next factory location as it expands worldwide production to reach a goal of 20 million electric vehicles per year by 2030.
3. Electronic Devices
Much of the manufacturing required for electronic devices includes intricate assembly and sophisticated automation which requires a specialized set of skills. Thanks to the availability of workers ready to fulfill these roles, this sector has continued to grow exponentially over the years. In fact, as of 2022, electronic devices made up the third largest category of exports from Mexico after vehicles and mechanical appliances.
Though aerospace, automotive, and electronics manufacturing have emerged as leading sectors, medical device and IT manufacturing have also continued to expand as well. With the support of shelter services in Mexico, U.S. and other foreign manufacturers can streamline their production setup and long-term operations by delegating a range of administrative tasks and responsibilities.
This, in addition to the instant access to a well-trained industrial workforce, solid infrastructure, and lower costs, all makes manufacturing in Mexico a competitive advantage.
To learn more about how a shelter services partner can benefit your operation, contact IVEMSA today.
Sources:
https://www.trade.gov/country-commercial-guides/mexico-aerospace
https://www.worldstopexports.com/automotive-parts-exports-country/
https://www.statista.com/statistics/1099280/mexico-consumer-electronics-exports/