Why Mexico Is an ‘Undiscovered Opportunity’ for Entrepreneurs: The Focus on Mexican Manufacturing Companies

Last Updated on February 26, 2024

It is common for entrepreneurs to overlook Mexico, but it offers a wealth of opportunities, especially in the manufacturing sector. Due to its large and growing population, strategic location, and competitive costs, Mexico is a popular destination for Mexican manufacturers.

Why is Mexico a Good Place to Manufacture?

There are many reasons why Mexico is a good place to manufacture. Here are just a few:

• Cost competitiveness: Mexico's labor costs are significantly lower than developed countries, such as the United States and Canada. This makes Mexico a very attractive destination for businesses looking to reduce manufacturing costs.
• Strategic location: Mexico is located between the United States and Latin America, making it an ideal location for businesses serving both markets. Mexico also has free trade agreements with other countries, which further reduce trade barriers.
• Skilled workforce: Mexico has a large and growing pool of skilled workers. The country's education system produces more and more engineers and other technical workers, which helps meet the manufacturing industry's needs.

Mexico is rapidly becoming one of the most profitable and appealing manufacturing locations in the world. Mexico has a low labor cost base, next-door proximity to North American markets, free trade agreements with nearly every country in the world, and a highly skilled and diverse work force, making it an ideal location for manufacturing. Mexico is the ideal location for businesses looking to maximize profits while producing high-quality products; from automotive to aerospace, electronics to medical devices, Mexico is an ideal location. Businesses can not only reduce labor costs, but they can also gain access to a skilled and experienced workforce, which can help them produce the best goods possible. Furthermore, Mexico’s open trade agreement with nearly every country in the world is a major advantage for businesses looking to expand their global footprint. As a result of these advantages, Mexico is an excellent manufacturing destination for many businesses.

China Merchants Holdings

Opportunities for Entrepreneurs in Mexican Manufacturing Companies

Mexican manufacturing companies offer a number of opportunities for entrepreneurs. Here are a few examples:

• Start your own manufacturing business: Mexico is an excellent place to establish your own manufacturing business. The government supports foreign investment, and there are resources available to help entrepreneurs get started.
• Become a supplier to existing Mexican manufacturing companies: Many large Mexican manufacturing companies have operations in Mexico. Entrepreneurs can provide these companies with goods and services, such as raw materials, components, and assembly services.
• Start a contract manufacturing business: Entrepreneurs can start a contract manufacturing business to provide manufacturing services to other companies. This can be an excellent option for entrepreneurs who have manufacturing experience but do not want to invest in their own manufacturing facilities.

Examples of Successful Mexican Manufacturing Companies

Here are a few examples of successful Mexican manufacturing companies:

• Amerex: Amerex, like many companies performing large-scale manufacturing that required sub-assembly of their products, began to face mounting pressure from their competitors that were having products produced in Asia. In order to remain competitive, Amerex needed an assembly in Mexico solution to meet the price pressures from the Asian market.
• Kent Water Sports: In the dynamic world of water sports, staying ahead of the competition requires efficient supply chains and the ability to meet high demands. Kent Water Sports, a prominent player in the industry, faced significant challenges with their existing contract manufacturers in China. 
• Schutt Sports: Schutt Sports’ Innovative Partnership for Enhanced Efficiency and Cost Savings Schutt Sports needed a partner that could help them cut operations costs from a main line in their manufacturing operations: refurbishing and reconditioning football helmets for a variety of clients, including high schools, major college football programs, and the NFL.

Conclusion

Mexico is an undiscovered opportunity for entrepreneurs, especially in the manufacturing sector. The country offers several advantages, including cost competitiveness, a strategic location, and a skilled workforce. Entrepreneurs who are looking for an ideal place to manufacture their products or provide manufacturing services should consider Mexico.

FAQs

Q: What are some of the challenges of manufacturing in Mexico?

A: Some of the challenges of manufacturing in Mexico include:

• Language barrier: The majority of Mexicans speak Spanish, so it is important to have a good understanding of the language in order to do business in Mexico.
• Corruption: Corruption is a problem in Mexico, and it can be difficult to navigate the regulatory environment.
• Infrastructure: The infrastructure in Mexico is not as developed as in some other countries, which can make it challenging to transport goods and materials.

Q: What are some tips for entrepreneurs who are considering manufacturing in Mexico?

A: Here are some tips for entrepreneurs who are considering manufacturing in Mexico:

• Do your research: Before you start manufacturing in Mexico, it is important to do your research and understand the market, the regulatory environment, and the challenges that you may face.
• Find a good partner: It can be helpful to partner with a local company that can help you navigate the Mexican business environment.
• Start small: It is best to start small when you are first starting out in Mexico. This will allow you to test the market and learn the ropes before you make a big investment.

Q: What are some of the most promising sectors for manufacturing in Mexico?

A: Some of the most promising sectors for manufacturing in Mexico include:

• Automotive: Mexico is a major producer of automobiles and auto parts.
• Aerospace: Mexico is a growing player in the aerospace industry.
• Electronics: Mexico is a major producer of electronics, such as computers and smartphones.
• Medical devices: Mexico is a growing producer of medical devices.

Q: How can I get started with manufacturing in Mexico?

A: There are a number of resources available to help entrepreneurs get started with manufacturing in Mexico, the most effective being a nearshore manufacturing partner like NovaLink. NovaLink can help you navigate through all the obstacles to get manufacturing up and running quickly.