Asian Companies Benefit from Manufacturing in Mexico
By José Luis Burnes | Business Development Manager - Monterrey at American Industries Group®
With global disruptions in supply chains and logistics processes in recent years, international companies are working urgently to become more agile, resilient, and responsive. Mexico has positioned itself as an attractive option to achieve this for manufacturers serving US markets due to various factors, including its geographic location, openness to trade, competitive labor costs, and mature industrial network and infrastructure, among others.
Reorganization of global supply chains
The ongoing reorganization of global supply chains and further division of competing economic blocs since the trade war between the US and China escalated in 2018 with the imposition of nearly 20% tariffs on the majority of Chinese imports, added to the high costs of and significant delays in international logistics processes, has caused a boom in Mexico manufacturing. This increased industrial growth is driven in part by significant Asian investment in the country, especially in the northern state of Nuevo León.
Today, Chinese and North American companies with a presence in China are seeking immediate opportunities to relocate their value chain to North America and start manufacturing in Mexico as quickly as possible due to demands from US clients refusing to pay tariffs and increased logistics costs.
A safe haven and ideal logistics in Nuevo León
With its strong industrial network and lower labor costs than China, this state bordering the US has attracted an estimated 300 Asian companies in the last three years, with foreign direct investment there reaching an 11-year high in 2021 of US 4 billion. From the state’s capital city of Monterrey, container trucks can reach the US border in just two days and for an estimated US 600 compared to the US 10,000 and one month from China.
Welcoming and understanding Chinese companies
American Industries has long-standing relationships and alliances with the Chinese manufacturing community in Mexico, including the Chinese-operated Hofusan Industrial Park near Monterrey, where 20 Chinese firms are already operating or in the process of setting up. The park is expected to house 50 companies at full capacity, providing a strong supplier and business network for companies arriving from Asia. American Industries’ shelter services in Mexico have helped several Chinese companies, such as KUKA Home, which operates in the park and currently employs 700 workers there.
This experience of welcoming international companies from Asian and around the world has allowed American Industries to gain an understanding of how to communicate, build trust, manage expectations and ensure compliance for Chinese companies arriving in Mexico. If you need to start up offshore or nearshore operations quickly and headache-free set to save on tariffs and ensure business profitability and continuity, reach out today to see how we can help.