The manufacturing industry is the main economic activity in the State of San Luis Potosi.

There are several advantages of manufacturing in San Luis Potosi. Therefore, the manufacturing industry in San Luis Potosi, is extremely important and represents approximately 25% of its Gross Domestic Product (GDP). For instance, San Luis Potosi counts with a total of 9,962 manufacturing companies.

Furthermore, San Luis Potosí ranks in fifth place of the ten world cities with less than two million inhabitants that show the greatest economic potential, according to the ranking Global Cities of the Future published by the Financial Times magazine. Likewise, the capital of San Luis Potosí, ranks ninth among cities for the highest business profitability.

Moreover, San Luis Potosí occupies second place within Mexico, in terms of the specialization of the states in the automotive industry due to its added value of 39.4%, according to the Government of the State of San Luis Potosí. The manufacturing sectors with the highest participation in the state are transportation equipment (automobiles and auto parts), industrial machinery and equipment, electric appliances and electrical power generation equipment.

Why is San Luis Potosi one of the main manufacturing States in Mexico?

San Luis Potosi is an attractive state among the manufacturing industry, due to its competitive and highly skilled labor force, its privileged geographical location, and its existing clusters such as the automotive, logistics and medical cluster, which as a result you can find numerous suppliers from these industries in the State. In addition to its extensive number of highly developed industrial park, among other advantages San Luis Potosi offers for manufacturing companies.

Some of the main advantages that make San Luis Potosí an attractive state for companies looking to establish manufacturing operations in Mexico are listed below:

• Privileged geographical location 

San Luis Potosí is located in the center of Mexico, having access in a range of 2 to 7 hours by land, to the main cities and ports of the country, as well as the EE.UU border.  Certainly, due to its strategic location, companies have access to a concentrated supply chain, in a 300 km radius there is access to more than 850 automotive suppliers and 9 assembly plants.

• Supply Chain

San Luis Potosi, counts with a fast growing automotive supply chain.  The establishment of two OEM Plants (BMW and GM) which together employ more than 3,300 employees, led to strengthening the local automotive cluster, leading to more than 200 companies from the automotive industry in the State.

In addition, the State counts with a strategic tax scheme (Recinto Fiscalizado Estrategico), which provides a competitive advantage due to time saving in the supply chain of companies.

• Labor Force 

The state has a population of 2.8 million, with approximately 1.2 economically active individuals. Of these, approximately 20% are employed working in manufacturing industries.

San Luis Potosí has international educational institutions, universities, and technological institutes with programs focused on the needs of the industry, including dual programs. According to the Secretary of Public Education (SEP), from 2016 to 2019 there were more than 54,000 graduates from universities or technical institutes of which more than 30% of these are professionals in engineering and telecommunications careers.

Furthermore, the state counts with training centers, and centers for research, innovation and technological development in this area.

In addition to highly skilled labor force, San Luis Potosi counts with competitive labor costs.

• Infrastructure 

The state has the largest intermodal terminal in Mexico (RFZ) where approximate 20,000 loading and unloading maneuvers are carried out monthly.

Furthermore, San Luis Potosi counts with more than 20 industrial parks. The availability of highly developed industrial parks reflect the opportunities for new investments, and facilitates companies to transfer their products to other states and worldwide.

Due to the manufacturing advantages San Luis Potosi offers, several foreign companies have decided to  establish manufacturing operations within the State.

Despite of the difficult economic situation that the world and all states in Mexico are going through, San Luis Potosi was one of the top 5 states with greater foreign direct investment (FDI) in the first semester of 2020, reaching a total of $880.20 million dollars, according to Lider Empresarial. 

 Are you thinking of establishing manufacturing operations in San Luis Potosí?

Mexcentrix can help you, our headquarters are established in San Luis Potosí.  We count with over 20 years of experience providing strategic guidance for low risk manufacturing in Mexico. We assure your company a successful and timely start of operations in Mexico.

The business services we offer are, among others:

• Start- up & shelter
• Human Resources
• Foreign Trade and IMMEX Program
• Tax and Accounting
• Consulting and Auditing

Our services are 100% guaranteed, we are committed to the high quality service that our clients deserve, and we count with the know-how, experience and infrastructure to make it happen.

Start your Mexico manufacturing operation successfully, with help from the experts.

Contact us 

Mexico presents advantages for manufacturing companies in 2021

Last year (2020) was a tough one for all industries, including the manufacturing industry, as they had to lead with a significant reduction in income and sales and which led to many changes and need to adapt.  Among the top industries affected are the automotive and aerospace industry, and service industries such as restaurants, hotels, etc..  Nevertheless, 2021 is a more hopeful year for most industries, including manufacturing.

The opportunities for the manufacturing industry in Mexico for this year

The pandemic challenged all industries, but it also presented an opportunity to analyze costs, ways of improvement, and to overcome changes. Which has led companies to search for alternatives, make better use of their resources and cut costs.

In which Mexico through its high skilled labor and competitive labor costs can play an important role.

Furthermore, the US and China trade conflict is still ongoing, as even though after several negotiations and that U.S. – China phase 1 trade deal was signed on January 13^th, it cut some U.S tariffs on Chinese goods in exchange of China agreement to expand purchases of certain US good and services and address some U.S objections on intellectual property practices.  But still, some of the imposed tariffs remain unchanged.

Therefore, additionally to the abovementioned, the challenges caused by Covid-19, the increased labor costs in China and the rising tensions in the South China Sea, have raised concerns about manufacturing goods in China and shipping halfway around the world, leading some companies to reconsider where to set up operational manufacturing  facilities, and to look for other options including onshoring or nearshoring.

In addition to the fact that the current travel restrictions between U.S. and China due to pandemic have complicated the situation.

Mexico plays an important role in this field, as in 2019 and 2020, Mexico overcame China to become U.S. number one trading partner, and many foreign manufacturing companies have decided to invest in Mexico and establish manufacturing operations in the last years.

Companies have been considering establishing manufacturing operations in Mexico due to the different advantages it offers such as:

• Competitive labor costs
• Highly skilled labor force
• Proximity to US, which due to a similar time zone facilitate communication and travel and which leads to lower shipping costs.
• 13 Free trade Agreements with 50 countries
• Foreign Trade and Tax Incentive Programs, such as the IMMEX Maquiladora Program.

The above-mentioned are some of the advantages Mexico has been offering for manufacturing companies in the last years and which will remain in 2021. These are some of the benefits that had led manufacturing in Mexico to rise in popularity in the last 2 decades.

Are you looking to capitalize on the advantages of manufacturing in Mexico in 2021?

If you are looking to take advantage of the benefits Mexico offer for manufacturing companies, Mexcentrix can lead and support you in the complete process for establishing manufacturing operations in Mexico. Our shelter service offers full administrative and operational support including human resources, payroll, tax and accounting, foreign trade, customs, management IMMEX Program among others. Through our shelter program, our clients can focus on what they do best (production, quality, materials) and let us do what we do best.

Through Mexcentrix services, we ensure 100% compliance with Mexican law and regulations, and our clients can avoid unnecessary problems and costly mistakes. In addition, we offer ongoing consulting to keep our clients updated about any changes in applicable laws and regulations.

Furthermore, our specialized and highly qualified teams have helped our clients during these difficult times due to the pandemic, to implement measures designed to decrease the impact of the economic crisis in their operations and to be able to adapt in the most effective way.

For additional information regarding our services or if you need a cost model for your operations in Mexico, contact us.

Mexcentrix will support your company for a smooth start and running of operations in Mexico.

The aerospace industry in Mexico has become one of the nations top industries

The aerospace industry is currently one of the most important in the world and in Mexico. North America is the region with the largest participation, with 51.1% of the total, according to Mexico Industry. In Mexico all the components of an aircraft are manufactured, including engines, cargo doors, fuselages, landing gears and connection system. Mexico ranks as the 14^th largest aerospace manufacturer in the world, according to IHS Markit, and 12^th place worldwide regarding exports of the aerospace industry.

In 2019 the aerospace industry exported a total of $9.5 billion dollars, the main destination country being the United States. Nearly 75% of Mexican aerospace industry’s production is consumed by the USA, and around 20% by Europe.

Aerospace Industry in Mexico has grown 14.4% in 15 years

The aerospace sector has reached an annual growth of 14.4% in the last 15 years (Mexico Industry, 2020), becoming one of the nation´s top industries.  According to the FEMIA (Mexican Aerospace Industry Federation), aerospace suppliers in Mexico grew from 100 companies in 2004 to over 300 in 2019). By the end of 2020 there were approximately 350 aerospace companies in Mexico.

Out of the total number companies within this sector, according to Verónica Rojas, research professor at the College of Engineering of the Center for Technical and Higher Education, 79% are dedicated only to maquila, 11% to repair and construction of engines and 10% to research and innovation in this area. Showing that Mexico has managed to consolidate itself as one of the main manufacturing centers.

The main states that contribute to this industry are Baja California, Chihuahua, Sonora, Nuevo León and Querétaro; which, due to the great growth in production and demand, have already developed academic programs together with universities and technical institutes that are linked to the needs of that industry. As of 2019 the existence of aerospace companies within the states abovementioned summed a total of 290, divided as follows:

Mexico’s competitive advantages have brought investment in the aerospace industry

Some of the countries that have already invested in Mexico within this sector are the United States, Canada, France and Spain; which have seen the competitive advantages that the territory has, such as the quality of the workforce, the low cost of production, the geographical position and the commercial agreements that give access to large markets.

Are you thinking of establishing your aerospace company in Mexico? Contact us. Our array of incorporation, shelter services and outsourcing has helped set up several aerospace companies with a successful and timely start of operations in Mexico.

We can support you with the following activities, among many others:

• Site selection
• Company incorporation 
• Permits and licenses procurement
• Recruiting, training and outsourcing payroll.
• Managing all administrative functions, including finance and labor.
• Tax and accounting outsourcing
• Import and export operations, customs, freight and logistics coordination, among others.

Sources:

• Mexico Industry
• IHS Markit