Despite last years’ global economic downturn, the State of Nuevo Leon remained a leader in Mexico for foreign direct investment, especially for companies manufacturing in Mexico. In 2020, the state received 12% (US 3.4 billion dollars of FDI), 65% percent of which was in the automotive and equipment manufacturing industry. This impressive growth, especially in the automotive and home appliance industries, is the result of many factors. These include external factors, such as global trade relations and changes to rules of origin contained in the new USMCA trade agreement, as well as the region’s attractiveness to international companies in Mexico due to its market and labor stability, solid infrastructure, safety, connectivity, and geographic location on the border with the United States, to name a few advantages.
The state’s capital city, Monterrey, is where much of the state’s industry is concentrated. It has the most diverse and mature environment for manufacturing in Mexico and one of the most stable and productive labor environments in the country. The area is home to numerous international companies that have established their manufacturing in Mexico to diversify operations, be closer to the North American market, and most recently, adapt to new consumer buying habits with the explosion in e-commerce.
The area is also one of the main regions for automotive manufacturing in Mexico. The industry is currently undergoing significant changes globally due to shifts in global trade relations and the implementation of new rules of origin for manufacturers under the USMCA. These changes represent a significant opportunity for regional integration in the industry and tier one suppliers, with many companies looking to relocate from Asia making investments across the entire supply chain. This is leading to the continued development of second and third tier suppliers that are already established in the country and the creation of alliances among manufacturers of auto parts and components.
Another one of the area’s booming industries is the home appliances sector. Nuevo Leon is a leader in the country in the export of refrigerator-freezers, with 66% of these manufactured in the state. Recently, the Chinese company Hisense announced new investments in the state which will generate more than 7,000 jobs in this sector. This project is in addition to another estimated 10 new or expansion projects by other companies, further increasing competitiveness in the sector, making the supply chain even more robust, and positioning the state as a hub for home appliance manufacturing in Mexico. The state government is also implementing programs to boost competitiveness, including consulting projects with the participation from engineering students in eight undergraduate and three master’s degree programs.
At only 139 miles to the closest US border crossing, the state is also ideal for companies looking to rework their supply chains to depend less on China and implement new systems for logistics, warehousing, and distribution centers. A program aimed at transforming logistics, known as Nuevo León 4.0, has been implemented to support the area’s industry and logistics through digital transformation actions in universities and innovation centers, positioning the state as one of the most attractive sites for Industry 4.0 in America.
This growth in state is creating a greater diversification of productive processes in the region in a variety of industries, which will help shorten lead times and improve quality overall. If you are looking to start up manufacturing services in Mexico, don’t hesitate to reach out to American Industries Group. We believe in partnership, and in creating a team with our suppliers, associates, and customers. By complementing each other's strengths, we create synergy, resulting in your success story in Mexico.
By Paulina González Reyes | Monterrey Regional Director | American Industries Group®
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