Below here are the reasons why manufacturing in Mexico will continue to flourish and these are the true reasons. However, if you are still suspicious of manufacturing in Mexico, then check out the list of benefits given:
Cheap shipping and labor costs
The most common advantages of manufacturing in Mexico are the cheap costs of shipping and labor. While per-piece manufacturing may be efficient in East Asia, the savings are compensated when shipping cargo halfway across the globe. These prices are really expensive and will go higher in the coming years. Also, trans-oceanic shipping is only recommended for full containers. Parts and components from Mexico can easily be shipped at lower rates in smaller quantities.
Speaking of labor costs, the average labor rates in Mexico are lower than labor rates in China.
Small supply chain
Building components in Mexico is just a fraction of the supply chain of what it will be anywhere else in the world. If you have received a crucial order from your customers, then manufacturing in east Asia will not help you get the parts right away. While when you manufacture in Mexico, those parts are instantly delivered in a day or two via truck freight.
Close proximity
If you have a choice to work at a place which is 5 minutes from your home or at a place which is an hour from your home, which one will you choose?
Manufacturing in Mexico is for those who consider time commitment important. Some of the things you gain when manufacturing here is:
Faster, affordable flights: If you operate out of Detroit, then a flight to Shanghai will cost you $1500 and take you 15 hours to reach while a flight to Mexico is just $700 and will take 3-4 hours to reach.
Time difference: When it is 6 am in Detroit, it is 6 pm in Shanghai. It means there is a big time gap while in Mexico, it is just an hour difference which makes business a lot easier.
Professional workers
Auto parts production isn’t new in Mexico. Professional and experienced parts workers are known to produce a large variety of components and parts which doesn’t just reduce costs but also enhances quality. More than 100,000 engineers graduate daily in Mexico and on top of that, they are skilled in different fields such as constructions, manufacturing as well as engineering.
Social responsibility
Mexico is a socially responsible country when you talk about their products and workers. Hence, it keeps the rights of the companies and laborers intact.
- Mexico labor laws are the same as those of the United States and Canada, encouraging a 48-hours work week in opposition to a 60-hour work week in Asia.
- Mexico has rigid worker safety rules and regulations and are purely against child labor.
- Mexico makes use of safe materials and unlike the materials used in facilities in Asia.
A healthy business environment
When thinking of Mexico’s pro-business environment, you will see 12 free trade agreements agreed upon by 44 nations. With regards to infrastructure and economic policies, Mexico is one of the best nations in the world. You will be grateful to the consistent transparency, democracy and regulations followed here.