Manufacturing in Mexico vs. China
Reshoring manufacturing in Mexico vs. China has many advantages. We at NovaLink believe manufacturing in Mexico is the best option for cost and quality.
The Benefits of Manufacturing in Mexico vs. China
Reshoring manufacturing in Mexico vs. China has many advantages. We at NovaLink believe that full service manufacturing in Mexico is the best option for cost, quality, productivity, and delivery. You may consider moving your production out of China and into a different country like the US or Mexico if you are currently manufacturing your products in China but find that the tariffs imposed by the United States are affecting your bottom line. It is always a challenge to move production from one location to another, especially when the locations are across the Pacific.
Moving your manufacturing out of China has a lot of details you’ve got to keep in mind, and not paying attention to those details could cost you later on. Consider some of the factors you should consider when moving out of China, and some of the best Mexico manufacturing options for your company.
NovaLink Manufacturing Facility Video
NovaLink has released a new video highlighting the versatility of their manufacturing facility in Matamoros, Mexico. In this video, you will be able to see the factory and its associates in action. The video, which was filmed on the floor of the manufacturing facility, illustrates the variety of manufacturing operations and the wide range of skills represented by the workforce. As well as demonstrating NovaLink's commitment to first class manufacturing, the video also emphasizes its commitment to safety protocols for the health of its workers and clients.
Why Are Companies Moving Manufacturing out of China?
Manufacturing is a major industry in China, as we know. A third of supply chain leaders plan to move manufacturing out of China by 2023, according to Gartner research. Here’s why so many companies are moving out:
- Companies learned from the recent Covid-19 pandemic that they cannot rely on just one supplier. Meanwhile, governments across the globe are trying to get companies out of China. Many companies are considering Mexico as a potential location.
- In 2018, the United States imposed tariffs of 25% on Chinese goods. Importing goods from China into the US was therefore very expensive
- Three or four decades ago, Chinese labor was one of the cheapest in the world. In recent years, it has greatly increased to $14000/year, which is a huge increase. Manufacturing in China has become more expensive.
Made in China Myths
Select any of the facts to learn the truth about manufacturing in China.
Are Chinese Facilities Cheaper?
The cost of facilities in China has gotten so high that a Chinese company opened an industrial park in Mexico instead of China.
Is Chinese Labor is Cheaper?
According to Boston Consulting Group, workers in Mexico's manufacturing sector made 60% more than their Chinese counterparts in 2000. Now they earn 11% less.
Is Chinese Labor is More Productive?
"Mexico has continued to stay more productive than China per worker,” Justin Rose, a partner at Boston Consulting Group in Chicago, told Quartz. “Sometime in 2011 or 2012, from a labor-cost perspective, it became cheaper to put manufacturing capacity in Mexico than in China.”
Our Manufacturing Process is Easy
Our team at NovaLink has the process of setting up manufacturing in Mexico down to a science. Whether you’re a big company or a startup, NovaLink can handle the process, consulting for supply chain, software, facilities, and manpower to get your business up and running fast and efficiently.
Is it Cheaper to Manufacture in Mexico?
While manufacturing in China may provide some immediate cost advantages, it is generally more cost-effective to operate manufacturing operations in Mexico over the long term.
- Manufacturing Labor is Less Expensive and More Plentiful than China
- There is an abundance of warehousing and manufacturing space on the border of the US & Mexico (particularly in Texas) that is significantly more inexpensive than in China.
- In light of the current supply chain problems using sea freight, the speed of the arrival of goods from Mexico to the US is perhaps the greatest advantage offered by manufacturing in Mexico. In comparison to China, it takes a fraction of the time for your products to reach American warehouses and stores.
- US buyers, citing poor quality and delays from China, are buying more goods and supplies from factories located in Mexico.
- Due to the US Free Trade Agreement with Mexico, it is relatively inexpensive and almost seamless to move goods across the border. Currently, Chinese goods entering the US are subject to high tariffs, which makes the process of transporting them into American markets very expensive.
- In Mexico, energy costs are comparable to those in the United States, making them both cheaper and more environmentally friendly. There is a high dependence on coal in China, and there is a gas shortage, making energy costs high and causing frequent power outages.
- The exchange rate for the Peso compared to the US dollar is very favorable, allowing investments in Mexico to go further than investments in China.
- The intangibles of manufacturing in Mexico; easy setup model, protection against intellectual property theft and limited legal liabilities are benefits that are not offered when manufacturing in China.
What Do We Manufacture?
Currently NovaLink manufactures everything from aircraft seating, activewear, fire extinguishers, wire harnesses, patio furniture and water meters, among others. The company has facilities in the border cities of Brownsville, Texas and Matamoros, Tamaulipas, Mexico. NovaLink’s near-shore contract manufacturing services and highly-skilled workforce are the ideal solution for all companies looking to reduce costs associated with manufacturing from large, blue-chip corporations with brand name labels to the small and medium-sized companies that have limited financial and human resources to effect a near-shore or offshore manufacturing platform.
Are You Ready to Begin Manufacturing in Mexico? Contact Us for a Free Consultation
Explore More: Discover Related Blog Posts
Expand your knowledge and delve deeper into manufacturing in Mexico vs. China with our curated collection of related blog posts.
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- The Pros and Cons of Outsourcing Manufacturing to Mexico vs. China
- How Mexico’s Proximity to the US Makes It a More Attractive Manufacturing Destination Than China
- 5 Reasons Why Mexico is a Better Choice for Manufacturing Than China
- Benefits of Manufacturing in Mexico vs. China: Which Country Offers More Value for Your Business?
- The Impact of Trade Agreements on Manufacturing in Mexico and China
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