Recently American Industries hosted a webinar focusing on how automotive manufacturing in Mexico can benefit from the new USMCA and some critical considerations companies will need to keep in mind regarding changes in automotive rules of origin affecting manufacturers and for starting up operations in Mexico. Panelists shared valuable information for companies considering Mexico manufacturing, including past and current market trends and predictions for future growth and opportunities in the area due to changes in the global economy and trade policies.

Offshore Manufacturing in Mexico

The first presenter, Jim Swanson, who has served as President of The Stewart Company for 32 years, shared his perspective and experience as a manufacturer’s representative focused on Asian automotive OEMs representing 20 main companies. He highlighted the benefits of offshore manufacturing in Mexico, including reduced labor costs, the country’s numerous open trade agreements, existing industry clusters, and reduced travel time and similar time zones compared to Asian low-cost countries (LCCs). He also listed some important considerations when moving operations to Mexico, including the importance of clearly defining objectives, legal and operational strategies, and target market, as well as thorough market analysis and identifying competitors. He further emphasized the opportunity that Mexico manufacturing currently represents, stating that “If your competitors aren’t already in Mexico, they are considering it.”

The next presenter was Kenneth Smith Ramos, Former USMCA Chief Negotiator for the Government of Mexico and nowadays Partner at AGON, a company offering legal, strategic and financial consulting services. He gave a detailed presentation regarding the modernization of NAFTA and USMCA automotive rules of origin, explaining how they were negotiated, their importance, and how they work to grant preferential access for qualifying exported goods to promote value chain integration in North America and encourage productive linkages between regional industries.

Additionally, he shared specifically how these changes will affect the automotive industry Mexico and how manufacturers will need to adapt, and the timelines they will have to implement them. It is important to note that these include transition periods of 3 to 7 years depending on the vehicle category, in addition to a clause allowing a case by case review for companies that need more time.

Mr. Smith also shared how reductions in intermediate Chinese inputs have created significant opportunities for other countries across a wide variety of sectors and how Mexico’s existing investment clusters make it ready to host nearshoring operations.

The third guest was Jim Scott, president of Ground Effects, Limited, an OEM direct second stage manufacturer, which has grown under his leadership over the last seven years from a 5-facility operation to a 30-facility international operation. He shared his experience in setting up offshore manufacturing in Mexico in Guanajuato and how it has become the company’s flagship site with the highest quality and best overall productivity.

All panelists mentioned that having a trusted partner specializing in shelter services in Mexico was key to their success. This support allowed them to leverage the providers’ on-the-ground experience, connections and logistics, and the immigration, customs, warehousing, management and back-office expertise needed for international companies in Mexico to start up operations in a streamlined and profitable manner.

Start up operations in Mexico

Lastly, Gerardo González, American Industries’ general director for the Guanajuato Region (the most important for automotive manufacturing) gave tips and recommendations on ensuring a soft landing in Mexico. He also highlighted additional reasons Mexico is the ideal place to set up nearshore and offshore manufacturing and the facilitation process for companies wanting to start up operations in Mexico, from site selection to the provision of day-to-day management and logistics services.

All panelists made one thing very clear: right now is the perfect time to look into starting up operations in Mexico to take advantage of the numerous opportunities it offers


By Isaías Rivera | Mkt & Business Development Manager | American Industries Group®
Did you find this content interesting? Sign up for our monthly newsletter to receive more articles and infographics.

Subscribe

If you would like to find out more about this topic or are interested in receiving a complimentary business case analysis for your operation in Mexico, please fill out this form or contact us at:

US toll-free: +1 (877) 698 3905

CAN toll-free: +1 (844) 422 4922

start@americanindustriesgroup.com
Please note that we do not accept job applications here. If you are interested in applying for a position, please visit the following link: https://www.americanindustriesgroup.com/jobs/




Related posts

August 3, 2021
Parachute Manufacturer finds a Safe Haven in Guadalajara, Mexico
Canopies Manufacturer finds a Safe Haven in Guadalajara, Mexico
Established in 1982, Performance Designs is a canopy manufacturer with operations in Guadalajara, Jalisco. Though it currently is an international company with operations in the US, […]
July 29, 2021
Manufacturing in Mexico
Ciudad Juarez preparing for the Future investing in World-Class Innovation Centers
With the arrival of the first maquila companies to Ciudad Juarez in the 1960s, the city quickly went from a border town famous for its nightlife, […]
July 24, 2021
Ciudad Juarez: Mexico’s Binational and Bicultural Heart of Industry
As one of the most important border towns in the world, Ciudad Juarez, located in Mexico’s largest state of Chihuahua, is known for manufacturing, exporting, and […]
July 15, 2021
Manufacturing in Mexico
US Companies can Mitigate Labor Shortages by Nearshore Manufacturing in Mexico
With activities beginning to return to normal across many cities in the United States, a sector of the economy experiencing a boom in demand—manufacturing—is facing a […]
June 21, 2021
My Home is Your Home: Chinese Furniture Manufacturer Expands To Monterrey
When the leadership of KUKA, a Chinese upholstery and furniture manufacturer, made the strategic decision to set up operations in Mexico to be closer to its […]
June 14, 2021
Nuevo Leon: Home to One of Mexico’s Most Skilled, Stable, and Productive Workforces
When relocating to a new country and starting up operations, a key factor in ensuring success is recruiting and maintaining personnel that is productive, stable and […]