Manufacturing in Mexico
Manufacturing in Mexico: Advantages
The offshoring advantages of manufacturing in Mexico are vast, which is why the country has become one of the largest manufacturing economies in the world. While open trade and proximity to the U.S. are both clear selling points, the draw to Mexico goes much further than those qualities alone. From electronics to aerospace and automotive manufacturing, a wide variety of industries are making the strategic decision to tap into Mexico's resources and highly competitive environment.
Mexico Manufacturing: Challenges
Despite its many advantages, doing business in Mexico still comes with its challenges. Fortunately, any difficulties that may arise can be overcome, and the Mexican government is heavily invested in ensuring ease of entry and operation for all businesses.
Cost of Operating in Mexico
When manufacturing executives are tasked by their respective boards and ownership to calculate the costs of operating a Mexico manufacturing facility, there is often a tendency to place an undue amount of emphasis on the cost of labor. In addition to the cost of both direct and indirect Mexican labor, there are many items that must be factored into any study aimed at determining the total “all-in” cost of Manufacturing in Mexico.
Learn more about costing a maquiladora in Mexico
Mexico vs. China
For many companies considering the offshoring advantages of various locations, China is the first country to come to mind. However, China is quickly losing steam as an offshore manufacturing destination and Mexico is taking its place.
How to Get Started in Mexico
While the benefits of manufacturing in Mexico are plentiful, the process of getting started can be complex. There are a variety of modes of entry businesses should consider. Every company's business model, goals and industry will play a part in determining how to launch an operation in the country.
Mexico Manufacturing Checklist
Use this checklist as a guide to help make sure that you have all your bases covered. Whatever your reason for expanding into Mexico, this checklist will help you examine both the basic and difficult questions that you should be considering.
What is a Maquiladora?
A maquiladora identifies a legal entity in Mexico that manufactures goods in the country through a foreign company. A maquiladora, also known as maquila, has preferential tariff programs agreed on by the U.S. and Mexico. The Mexican government recognizes the benefits derived from foreign companies establishing manufacturing operations in the country and therefore extends certain tax and trade benefits to maquila operations.