What Are the Best Locations in Mexico for Automotive Manufacturing?

Article Summary: Exploring key regions in Mexico to successfully launch automotive production, in addition to the benefits this solution provides U.S. and other foreign manufacturers.

The automotive manufacturing industry continues to thrive, with Mexico producing 3.5 million vehicles annually, according to the U.S. International Trade Administration.

Among the number of vehicles produced, 88% of vehicles are exported, with 76% bound for the U.S.

As automakers work to meet the demand of next-generation design and technology, sourcing enough industrial talent and space to keep production timelines on track is challenging.

For decades, global automotive leaders have relied on manufacturing in Mexico to meet cost and time constraints and get products to market faster.

Now, with more and more companies following this strategy, the question is where is the best area to launch production, and how can a Mexico shelter company help make the transition easier.

Four Central Areas to Consider Beyond the Border

Due to the favorable logistics, it’s no surprise that the dominant presence of automotive production in Mexico is set up along the U.S./Mexico border.

This includes factories focused on automotive parts as well as electronic components and after-market products.

However, as the border becomes competitively saturated, OEMs and large automakers have been concentrating on setups in central Mexico, particularly Bajio, an area comprised of several cities, including:

• Monterrey/Satillo Region – As one of Mexico’s most industrialized areas, the automotive sector dominates the area thanks to reliable infrastructure and convenient transportation routes. With expanding opportunities, particularly for U.S. automakers located in the central or southern states, Monterrey has emerged as one of the top global manufacturing areas.
• Queretaro – With a quickly growing population and direct connection to various modes of transport, this area continues to be a targeted area for growth in both automotive and aerospace manufacturing.
• Guanajuato – This city covers all the logistics of convenient highway, railroad, and air transport to support the growth of automotive manufacturing in the area. Guanajuato also has access to 80% of the Mexican market within a 500 km radius and 70% of Mexico’s automotive manufacturing sites, making it another one of the best locations to launch production.

Benefits of Manufacturing in Mexico Regardless of Region

1. Connection with both U.S. and Mexico infrastructure

2. Industrial talent availability and experience

3. Competitive labor costs

4. Large automakers already established in the area to share resources

5. Access to new launches of products

6. Easy travel for U.S. executives to visit and supervise factories in Mexico

7. Availability of industrial space and suppliers specific to automotive manufacturing

8. Well-positioned access to the U.S. market

9. Close to ports, railways, and other modes of transportation

10. Reliable infrastructure and logistics

Get Started with a Site Selection Analysis from a Shelter Services Company

There are several locations, including the U.S./Mexico border, to choose from to support automotive manufacturing.

To help decide which location is best for a company’s project needs, or to eventually diversify into other areas of manufacturing, a Mexico shelter company can help assess viable options to narrow down the search.

Through IVEMSA’s site selection analysis, U.S. and other foreign manufacturers can receive a breakdown of:

• Viable site locations based on specific project needs
• Approximate labor and operational costs per region
• Comparison of the benefits and potential challenges of each city

Get the expert insight and guidance necessary to get your operations up and running quickly and efficiently.

Contact IVEMSA today to get the conversation started.

Source:

https://www.trade.gov/country-commercial-guides/mexico-automotive-industry