5 Competitive Advantages of Manufacturing in Mexico

Global manufacturing competitiveness continues to rise as new technologies drive higher demand. And Mexico serves as a central hub of industrial support for U.S. and other foreign manufacturers as they seek to expand their production.

For decades, manufacturing leaders have successfully established a presence in Mexico with consistent growth across several sectors throughout the years. As more companies decide to follow suit and grow their own international footprint, they have several competitive advantages thanks to what manufacturing in Mexico has to offer.

Here are reasons why Mexico continues to be a viable option when expanding production and how shelter manufacturing services can make a positive difference.

1. Close Proximity to U.S. Audience

Mexico is an ideal location for foreign manufacturers serving a U.S. audience. The proximity between Mexico and the U.S. results in quicker deliveries and less expensive shipping than other popular trade areas, such as China. Also, Mexico’s expansive transportation routes and supply chain create greater reliability so companies can get their products to market faster.

2. Skilled, Low-Cost Labor

The U.S. has faced setbacks in fulfilling manufacturing roles over the past few years. With an entire industrial generation entering retirement and younger generations not as quick to take their vacant spots, there are millions of skilled laborers needed to complete the production demand.

Meanwhile, Mexico is known for its industrial workforce availability and low cost of labor, which makes it an optimal choice for foreign operators when recruiting and retaining qualified workers.

3. Commitment to Quality

Large-scale production and quicker delivery times don’t take away from the commitment to quality when manufacturing in Mexico. There are several quality assurance protocols in place to ensure manufacturers stay competitive and keep their reputations intact.

Additionally, the relatively quick travel time between the U.S. and Mexico allows project leaders to provide in-person production oversight more easily and manage adjustments as needed.

4. Favorable Trade Relations

After gaining speed for several years, Mexico surpassed China in 2023 as the top trading partner with the U.S. This is partially due to the incentives detailed by the trade agreement between the U.S., Canada, and Mexico which sets requirements regarding content origins and intellectual property protections. In addition to the USMCA, Mexico has 12 free trade agreements with 48 other countries, making it one of the most open and competitive markets in the world.

5. Shelter Services in Mexico

To help U.S. and other foreign operators with Mexico manufacturing, there is the unique advantage of shelter manufacturing services. Working with a shelter company provides local expertise and experience to help companies make a seamless transition at a lower cost. Shelter services in Mexico include all administrative responsibilities necessary to launch production, including site selection, HR and payroll, taxes and accounting, and trade compliance.

Partnering with IVEMSA

Mexico has played an important role in the global market and has continued to rise in ranking as a quality trade partner for the U.S. and other countries. To benefit from the competitive advantages of manufacturing in Mexico while also saving on costs, contact IVEMSA today.

Sources:
https://ustr.gov/countries-regions/americas/mexico#:~:text=Mexico
https://www.trade.gov/country-commercial-guides/mexico-trade-agreements#