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Top Industries Manufacturing in Mexico

Top Industries Manufacturing in Mexico

Manufacturing in Mexico enjoys a combination of advantages not found anywhere in the world: lower labor costs, next-door proximity to North American markets, free trade agreements with nearly every country, a plentiful and highly skilled workforce, and production quality commiserate with U.S. and international standards. As a result of these advantages, manufacturing in Mexico continues to grow across most industries, both in size and sophistication and is the 12th largest exporter in the world.

 

Mexico’s large, 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 twenty years. There is now a highly skilled, and educated workforce that can excel in all the major industries in Mexico.

 

Every major global manufacturer can be found here with Mexico’s principal manufacturing industries being aerospace, automotive, auto parts, electronics, medical devices, furniture, metal mechanical, and plastic injection molding. Some manufacturers in Mexico focus on lower-cost assembly or contract manufacturing operations, while others opt for their own maquiladoras in Mexico that are complementary and collaborative with the rest of their supply chain.1

 

Key Advantages of Manufacturing in Mexico

Some of the main advantages that Mexico Manufacturing has include the following:

 

  • Mexico has the most free trade agreements in the world. NAFTA/USMCA (North America) and the new CPTPP gives manufacturers and suppliers tariff-free access to 11 countries throughout the Asia-Pacific (Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam).
  • Duty free temporary imports of raw materials and machinery under Mexico’s IMMEX program
  • Less volatile trade relationships given the close proximity to the United States with dedicated commercial border crossings and deep-water ports connected to the world.
  • Decades of foreign direct investment and governmental investment in the billions of dollars for modern facilities, infrastructure, roads, electricity, and water. 
  • Highly skilled and plentiful labor force that is largely bilingual and bicultural.



Top 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.2

 

1. Automotive Industry

The automotive sector is one of the most successful industries in Mexico because of the developed network of suppliers that it has established in the country over the last several decades.  Today, there are more than 1,900 manufacturers of auto parts in Mexico.  Combined, they account for 41% of the Gross Domestic Product (GDP) of the sector. 

 

There are three major automotive industrial corridors that have been formed in the country.  Each has its own distinctive characteristics and level of development.  The northern border region stands out as the most area for the industry.  The border accounts for 47.7% of the industry’s GDP, 68.6% of its employment, and 42% of all automotive industry companies with a presence in the country.  It is especially known for its production of trucks.  This is due to the presence of firms such as Kenworth, International, and Scania.

 

2. Aviation and Aerospace Industry

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 Export.gov.

 

3. Medical Device Industry

In Mexico, the medical device industry has grown steadily in recent years.  This has been driven by global technological advances, the digitization, and incorporation of new technologies, and by increased demand for medical devices due to changes in societal demographics.

 

Mexico is the leading exporter of medical devices in Latin America.  Its most important market is the United States, which receives 91% of Mexican made medical devices that are shipped overseas.  According to data provided by the Mexican Association of Innovative Medical Device Industries, the value of production of medical devices in the country now exceeds more than US $15 billion.  The industry also has generated more than 130,00 jobs.  In addition to accounting for .3% of national GDP, the medical device industry in Mexico accounts for 1.5% of the manufacturing industry’s Gross Domestic Product. 

 

Currently, Mexico is the eighth largest medical device exporter to the world.  As of 2018, the country exported more than US $8.2 billion worth of this class of product.  In addition to the United States, other top importers of medical devices that are made in Mexico include Italy, Germany, and France.  The main items that were exported to these markets were medical instruments for surgery, dentistry, and veterinary use; articles and orthopedics for fractures; mechanotherapy devices, oxygen therapy, and aerosol therapy equipment, as well as x-ray devices.

 

4. Apparel & Textile Industry

As Mexico’s fourth-largest manufacturing industry, the apparel/clothing, and textile manufacturing, accounts for 3.7% (1.3% in textiles and 2.4% in apparel) of Mexico’s manufacturing GDP.

 

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.

 

5. Consumer Products Industry

Many consumer products are being manufactured in 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.

 

Electronics is one of the most prominent industries in Mexico thanks to the increase of available engineers and design specialists. In the six-year period between 2010-2016, the sector was the recipient of foreign direct investment (FDI) that totaled US $6.7 billion.

 

The Mexican electronics sector is focused mainly on the manufacture of appliances and components that process some kind of information. The industry is divided into five major subsectors: audio and video, computing and office, semiconductors, communications and precision, measurement, control, and optical instruments.3 

 

Mexico is particularly competitive in the consumer electronics subsector, ranking among the major global exporters in some product classes. The largest cluster of electronics manufacturers in the country is located in the state of Jalisco and its capital, the city of Guadalajara.

 

Conclusion

Gone are the days 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 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, Exporta Wholesale 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.

For more information on Exporta please visit our website.

 

About Exporta Technologies

Exporta Wholesale is the largest marketplace connecting suppliers in Latin America with buyers in North America. Today, we have a network of over 5,000 Latin American suppliers serving a variety of consumer goods and product categories in the United States. 

 

Exporta’s marketplace offers buyers a full service experience in the origination, sourcing and managing of products. The platform was founded on the idea that curation and service are the most important elements in the buyer’s journey. Exporta’s marketplace is building technology that addresses the pains of sourcing products internationally at attractive prices.


References

  1. https://www.co-production.net/manufacturing-in-mexico.html
  2. https://napsintl.com/manufacturing-in-mexico/industries-in-mexico/#:~:text=industries%20in%20Mexico.-,Major%20Manufacturing%20Industries%20in%20Mexico,textile%2C%20and%20consumer%20products%20industries.
  3. https://princemanufacturing.com/a-look-at-the-major-industries-in-mexico/

 

 

 

 

 

 

 

 

 

 

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