The Easy Way to Become More Competitive in 2023

By Alma Rosa Ortega López | Institutional Relations at American Industries Group®
Published 01/19/2023

On the heels of global supply chain restructuring and changes in international trade in recent years, nearshoring in Mexico has become one of the best options for companies to improve logistics processes, save money, and become more competitive. In 2022 alone, it is estimated that nearshoring will generate approximately US 30 billion in Mexico, with between 75 and 100 US, Canadian, Chinese, Korean, and Japanese companies moving or expanding their operations here, making it the most popular destination in the world for foreign investors to relocate manufacturing operations.

The Easy Way to Become More Competitive in 2023

The trend has been gaining momentum since 2009, with Mexico being a logical choice for relocating production chains for companies in various sectors, especially the auto parts, manufacturing, and electronic industries. Mexico has well-developed industrial infrastructure and a stable trade relationship across North America regulated by the updated USMCA. In addition, it allows for greater supply chain visibility from end to end and several logistics benefits compared to Asia.

The occupancy rates for industrial real estate in Mexico have increased to 97%, and there is a waiting list of 400 companies seeking spaces along its most important corridors. In addition to e-commerce warehousing and companies in the electronic manufacturing industry in Mexico, many multinational automakers have also chosen to relocate their operations to Mexico to adapt to changes in global trade. With updated rules of origin in the USMCA, automobiles must have 75% of their components manufactured in Mexico, the US, or Canada to qualify for zero tariffs (an increase from the 62.5% under NAFTA).

The Easy Way to Become More Competitive in 2023

Mexico has also expanded the benefits it offers for international companies in Mexico under its IMMEX program, which allows manufacturers to receive a range of fiscal and other benefits. Additional advantages include competitive labor rates in Mexico, shorter lead times, reduced transportation costs, and increased intellectual property protection mandated under the USMCA.

Though the global business and manufacturing community will always face challenges and uncertainties, one thing is evident in this rapidly changing world: companies that can quickly adapt, innovate, and find for creative solutions to new problems will come out on top and be poised to earn greater shares of existing and new markets. If you are looking for an easy way to become more competitive in 2023, you should be considering nearshoring in Mexico. The easiest and fastest way to do this is by using shelter services in Mexico because it ensures you have an experienced partner that allows you to mitigate risk, save money and eliminate the steep learning curve that establishing operations in a new country implies.

Alma Rosa Ortega López

Institutional Relations

American Industries Group®

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