Manufacturing companies in Mexico: Major Industry Clusters
Many of the US manufacturing companies in Mexico have established their operations along the US-Mexico border. Others have chosen to be in the Central or West Coast regions.
For many manufacturers, there are two big factors to consider when choosing a location for transferring their manufacturing operation into Mexico: Proximity to customers and Availability of labor with relevant experience.
To assist businesses exploring options for manufacturing in Mexico, here we'll look at where major industry clusters are located.
Businesses set up manufacturing companies in Mexico because it lowers their costs and helps them compete with manufacturers in other parts of the world. However, Mexico is a large country and location is an important consideration. It determines transport costs and the availability of skilled and experienced labor, which influences start-up time, product quality, and manufacturing costs.
The border states from Baja California in the west to Tamaulipas in the east offer the obvious attraction of proximity to the US. The city of Matamoros in Tamaulipas for example, has convenient road access into the US, thanks to the four bridges that link it with Brownsville, Texas.
Not everything ships by road though. The auto industry uses rail to move assembled vehicles north into the US. A smaller proportion leave through seaports for Europe and other markets. Likewise, other large and/or heavy products are often transported by these methods.
The auto industry has been a particular driver of clustering away from the border. As Tier 1 suppliers serve customers within Mexico as well as others in the US, many see benefits in being close to the assembly plants.
Government and University Influences
In support of clustering, the Mexican government has supported development of specialized technical expertise and programs at specific universities. For example, Querétaro, an aerospace hotspot, hosts the Aeronautic University of Querétaro (UNAQ) which specializes in aerospace and aeronautical technology.
Industry Clusters in Mexico
The Four industries in particular are notable for forming clusters in Mexico. These are:
Automotive Industry Clusters
Automotive manufacturers are located primarily in Puebla to the southeast of Mexico City, (home to the legendary VW plant,) and Querétaro to the north of the capital. This has drawn many of the component suppliers to these states.
A third automotive cluster, this time of suppliers alone, is found in the border region. Chihuahua and Coahuila in particular are home to many component manufacturing companies.
Medical Device Industry Clusters
Mexico has a large and growing medical device industry. This is centered primarily in Baja California, on the west coast, in the Tijuana-Otay area, although manufacturers are located along the border region all the way east to Tamaulipas. Medical devices produced by manufacturing companies in Mexico include: nebulizers, intravenous bags and catheters, along with components for defibrillators, and a host of similar items.
Aerospace Industry Clusters
While several states, such as Querétaro, Sonora and Chihuahua, have several manufacturers serving the aerospace industry among their industries, the main cluster is found in Baja California.
Driven undoubtedly by proximity to California and Seattle, Baja California has become a center for fuselage and power system manufacturing. Companies in Sonora and Matamoros tend to specialize in turbine blades, and other jet engine components, while a more diverse group in Querétaro produces items such as: seats, motors, electrical harnesses and components.
Electronics Industry Clusters
The electronics industry is a complex one to describe. It ranges from manufacturers of appliances and contract electronics manufacturers, to suppliers to the automotive and medical device industries. Consequently, some electronics manufacturers are located within the automotive and medical clusters while others are further afield.
Tamaulipas for example is home to many electronics manufacturing companies. Likewise, many have chosen to set up operations in Querétaro. Appliance manufacturers are found in both Tamaulipas and Baja California, particularly TV manufacturers in the latter.
An exception, and perhaps the most significant electronics cluster, is in Jalisco, and more specifically, Guadalajara, (sometimes described as Mexico's Silicon Valley.) Located some 300 miles northeast of Mexico City, here you'll find a diverse mix electronics companies, including many household names that have chosen to establish manufacturing companies in Mexico.
Helping Manufacturing Companies Get a Start in Mexico
Manufacturers have been flocking to Mexico for years. They're drawn by a combination of lower costs than in the US, a business-friendly government and a university system graduating thousands of engineers every year. However, to maximize the advantages of manufacturing in Mexico it's essential to pick the right location.
Many companies find it makes sense to set up their Mexican manufacturing operation in a region already familiar with their particular products and manufacturing processes. Others are drawn to specific locations by the large customers they supply. Regardless of motivation though, the business of finding a location and setting up manufacturing in Mexico is challenging without local knowledge and "boots on the ground."
This is where it pays to work with a shelter company. Shelter companies simplify the process of starting up a new operation: many of the US manufacturing companies in Mexico today have taken advantage of such a service to gain their first foothold in the country.
IAI Mexico is a long-established shelter company serving the needs of businesses from the US and elsewhere, who need to manufacture in Mexico. IAI Mexico offers a range of services, from assistance with the legal and taxation aspects of company formation, through securing premises and staff, to provision of a complete manufacturing operation.
To learn more about how we help launch manufacturing companies in Mexico, Contact Us today.