Chihuahua: A Preferred Option for Nearshore Manufacturing in Mexico

Chihuahua, the capital city of the State of Chihuahua, is a medium-size city with a long history of engaging in manufacturing activities. This has been the State’s main activity for more than four decades, creating a culture of productivity and labor stability and putting Chihuahua on the radar of international companies in Mexico. Today, the State is the country’s leading state in exporting goods for the manufacturing industry and a preferred location for foreign direct investment and companies looking to start up manufacturing services in Mexico.

Some of the keys to Chihuahua’s success as a manufacturing hub include its strategic geographical location close to the border, as well as its highly trained and skilled, stable and available human talent and world-class infrastructure with a lower cost of living than other Mexican cities. Chihuahua’s world-class infrastructure includes combined-cycle and solar power plants that guarantee the availability and stability of electricity, as well as redundancy in natural gas pipelines, water, sewage, and IT infrastructure, among others. It is also an area that is free from natural disasters, and has great accessibility and an excellent business environment. These factors, among many other competitive advantages, facilitate the successful establishment and operation of international companies in Mexico.

A strong collaboration between local governments, academic institutions and industrial conglomerates (also known as clusters), has fostered the development and integration of a strong supply chain, another reason why Chihuahua is an industrial leader in Mexico.

Chihuahua is home to more than 100 international corporations employing more than 100,000 people. Chihuahua’s main manufacturing sectors include the aerospace industry Mexico, automotive and auto-parts, medical devices manufacturing Mexico, IT, mining, metal-mechanical, plastics, energy, BPOs and Shared Services, among others.

Companies that require trained engineers and highly skilled human talent are expanding to Chihuahua due to the city’s investments in educational and R&D infrastructure. The city of Chihuahua is the largest provider of engineers per capita in the country, and low-migration levels guarantee operational stability and an excellent labor environment with low turnover and absenteeism rates. Each year more than 5,000 engineering students and over 30,000 technicians graduate from local institutions.

The city is also home to the largest and most integrated aerospace cluster in Mexico with more than 50 plants from international corporations, including 6 OEMs and more than 40 certified suppliers occupying over 6 million square feet of state-of the art facilities and employing 17,000 people.

Chihuahua is also home to one of the most important auto parts clusters in Mexico. It is comprised of more than 40 plants from international companies in the sector that create more than 50,000 jobs. Some of the largest companies that call it home include Ford, DTR, Continental, Buelher, Tristone, Lear, Yazaki and many others. The main processes carried out in the automotive sector include plastic injection, aluminum injection, precision machining, metal stamping, thermal treatment, interior fabrication, security systems, electric and electronic parts and components and wire harnesses assembly.

In addition, Chihuahua is also a strong hub for medical devices manufacturing in Mexico, and is home to important companies such as Conmed, Essilor, Cardinal Health and Teleflex. The city is currently working on expanding in this sector, as it allows companies the ability to make their supply chains more resilient.

The state also gives companies access to a market of more than 1.2 billion consumers through the network of free-trade agreements that Mexico has with over 40 countries, the renewed free trade agreement with the US and Canada, its strategic geographic location that reduces the lead time to the north American market, its availability of talent at a very competitive cost and easy access to the east and west coast in the US. All of these are reasons why companies should consider Chihuahua as a logical choice to invest in Mexico.

By Sandra Malottky | Chihuahua Business Development Manager | American Industries Group®