Is your company considering manufacturing in Mexico?
Mexico has become one of the top manufacturing destinations due to its skilled workforce, proximity to the U.S., cost advantages, and trade agreements like the USMCA. However, choosing the right location within Mexico is crucial to ensuring your operation runs efficiently and cost-effective. Below you will find a guide with factors to consider for selecting the best site for your business.
- Understand Your Industry Needs
Different regions in Mexico specialize in various industries. Choosing a location that aligns with your manufacturing needs or an already established industry cluster, will help you take advantage of the local talent pool, suppliers, and infrastructure.
- Automotive: Predominantly in the Bajío region (Guanajuato, Querétaro, Aguascalientes, San Luis Potosí) and Northern Mexico (Chihuahua, Nuevo León, Coahuila)
- Aerospace: Strong presence in Baja California, Chihuahua, Querétaro, and Sonora
- Electronics: Concentrated in Tijuana, Guadalajara, and Monterrey
- Medical Devices: Mainly in Tijuana and Baja California
- Consider Proximity to the U.S. Border
If your supply chain depends on quick access to the U.S., a northern border state like Baja California, Sonora, Chihuahua, or Nuevo León may be ideal. These regions offer:
- Shorter transit times
- Lower logistics costs
- Established maquiladora (IMMEX) infrastructure
However, if labor costs are a major concern, you may find better rates in central or southern Mexico.
- Evaluate Infrastructure & Logistics
Your manufacturing site should have the necessary infrastructure, including:
- Road & rail access: Mexico has key highways connecting to the U.S. and industrial railways.
- Ports: If you rely on overseas shipping, look at locations with faster access to Veracruz, Manzanillo, or Lázaro Cárdenas.
- Airports: If you need fast global shipping, cities like Monterrey, Guadalajara, and Mexico City have major cargo hubs.
- Analyze Labor Availability & Costs
Labor costs vary across Mexico. Border cities typically have higher wages due to demand, while central and southern states offer more affordable labor.
- Higher wages but experienced workforce: Monterrey, Tijuana, Ciudad Juárez
- Balanced costs and availability: Querétaro, León, Aguascalientes, San Luis Potosi.
- Lower wages but growing talent pool: Puebla, Yucatán, Oaxaca (But not much industrial infrastructure or established industries).
Furthermore, labor is more difficult to find in the northern region, due to the competitive market.
- Review Incentives & Government Support
Many states offer incentives to attract foreign manufacturers. These can include:
- Tax Incentives
- Reduced utility costs
- Training programs
- Customs benefits
- Assess Security & Business Environment
While Mexico has strong industrial zones, security varies by region. Before selecting a site, consider the following:
- Crime rates & safety
- Local government stability
- Union activity
- Evaluate Real Estate & Operational Costs
The cost of leasing or purchasing industrial space varies by region. While northern states often have higher real estate costs, central and southern Mexico may offer more affordable and variety of available options.
Compare:
- Industrial parks with built-in utilities
- Custom-built facilities
- Availability of warehouse space
Selecting the best manufacturing site in Mexico requires balancing industry needs, location, infrastructure, labor, incentives, security, and costs. Each business has unique requirements, so conducting thorough research with support from local experts such as Mexcentrix can ensure a smooth expansion into Mexico.
If you’re looking for expert guidance on choosing the right site, navigating legal requirements, or understanding cost structures, contact us.