The latest advantages of manufacturing in Mexico
By Adina Moloman
Sources: Bloomberg Businessweek, Boston Consulting Group
The advantages and benefits of manufacturing in Mexico have been discussed for many years and the arguments are changing and /or growing every year.
In 2013 Boston Consulting Group has released a new report over the latest advantages of Manufacturing in Mexico.
Many of BCG studies includes analysis of how shifting production plants and investment from China to Mexico will bring more advantages to transnational corporations that are mainly interested in serving the US and Latin-America Market.
According to Bloomberg BusinessWeek Information and the 2013 Boston Consulting Group report, Mexico’s current main advantages are:
Lower labor wages – labor costs in Mexico are expected to be 30% lower than labor costs in China by the year 2015, with higher Mexican worker productivity according to the BCG report.
The advantage of having signed an impressive number of free-trade agreements covering 44 countries, comparing with China that is covering only a third of the free trade agreements;
Lower Energy costs for Mexican Maquiladoras comparing to Chinas facilities energy consumptions and a growing industry by clusters in Mexico.
The Mexican automotive cluster is playing an important part, where the majority of the companies manufacturing automotive and commercial vehicles and a significant number of companies producing automotive equipment, parts and components are located in Mexico (89 of the world’s top 100 auto parts makers have production in Mexico).
Mexico Manufacturers use up to four times as many U.S.-made parts and products as China’s facilities do, representing a direct benefit to suppliers located in the United States.
In the last two years transnational companies also are paying more attention to the strategic advantages of locating their production closer to their consumer market and that’s an extra reason why companies prefers to locate their production in Mexico, close to the U.S. consumers.
