Moving Manufacturing to Mexico
NovaLink's low-cost labor environment and close proximity to the U.S. makes Moving Manufacturing to Mexico easy and seamless.
Why Move Manufacturing to Mexico?
NovaLink’s low-cost labor environment and close proximity to the U.S. makes Moving Manufacturing to Mexico easy and seamless. In addition to operating two 200,000-square-foot Mexico Manufacturing factories in the city of Matamoros, NovaLink operates a 78,000-square-foot manufacturing facility in Saltillo, Mexico, and a 60,000-square-foot distribution facility in Brownsville, Texas. Across the board, manufacturing operations are reshoring manufacturing to North America, from big-name corporations to small and medium-sized companies, and avoiding the China tariffs. NovaLink’s Mexico contract manufacturing services are the ideal solution for all companies looking to reduce manufacturing costs.
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.
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.
Mexico Manufacturing Advantage
Mexico has emerged as a popular destination for manufacturing due to its strategic location, abundant labor force, and attractive trade agreements. Its proximity to the United States, the world's largest consumer market, allows for easier access to transportation and reduced lead times. Additionally, Mexico has a young and growing workforce, which is highly skilled and competitive in terms of wages. Moreover, Mexico has signed various trade agreements, such as the United States-Mexico-Canada Agreement (USMCA), that provide favorable tariff and duty rates to manufacturers. These advantages have made Mexico an ideal location for manufacturing operations in industries such as automotive, aerospace, and electronics, among others. As a result, many multinational corporations have established their manufacturing facilities in Mexico, taking advantage of the country's manufacturing prowess.
Decreased Time to Market
Mexico's location makes it an ideal nearshore manufacturing destination, with easy access to the U.S. market.
Inexpensive but skilled Maquiladoras Labor
With wages that are up to 80% lower than in the U.S., you can save big on your labor costs without compromising on quality.
Tax Incentives
Mexico offers a range of tax incentives and exemptions for manufacturers, making it even more affordable to do business here.
Free Trade Agreements with 44 Countries
There are 44 countries with which Mexico has free trade agreements. Manufacturers from the United States and Canada have access to Mexico through the United States-Mexico-Canada Agreement (USMCA).
What is the USMCA?
USMCA stands for United States-Mexico-Canada Agreement, which was signed on November 30, 2018. Essentially, it replaces the North American Free Trade Agreement (NAFTA) which was in place since January 1994. NAFTA slowly phased out tariffs on most goods between North America’s three main economic powers. All agricultural and textile products, cars, and other goods had their tariffs reduced or eliminated by 2008.
Tariffs Eating Your Profits? Move Manufacturing Out of China
The decision to Move Manufacturing out of China and into Mexico is an easy one when facing tariffs. Imported goods from factories in China are subject to a 25 percent border tax since July of 2019. These taxes, along with other Chinese tariffs, are designed to increase the price of Chinese products for American consumers and businesses. Your goods will be subject to a 25 percent border tax if you manufacture in China, so either you have to raise the price of your goods and pass the costs on to customers or take a hit on your profit margin.
The good news is that there’s a solution to the China tariff crisis: Move your company’s manufacturing to Mexico. Since the new trade agreements are in place, it’s now easier and cheaper to manufacture goods and services between these nations:
- There are no tariffs for products made in Mexico and imported into the United States that meet NAFTA rules of origin requirements.
- Lower shipping time for goods to get into the United States
- Lower average cost of shipping
- Lower number of days to start Mexico shelter services manufacturing
- Cost-effective ad more productive labor pool
Explore Other Resources
Please explore these other useful resources to better understand NovaLink Made in Mexico manufacturing:
Are You Ready to Begin Manufacturing in Mexico? Contact Us for a Free Consultation
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Office
6665 Padre Island Highway
Suite B
Brownsville, Texas 78521
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