The Evolution of Maquiladoras and How Mexico Shelter Services Fit In

Mexico’s maquiladoras emerged in the 1960s as a way to entice foreign direct investment into the country. Due to its geographic location, favorable trade agreements, and low cost of labor, Mexico became the center for global manufacturers to expand their production cost-effectively.

For decades, worldwide manufacturing leaders have benefited from the opportunities the maquiladora industry in Mexico provides. Now, a new wave of operators has started to explore manufacturing in Mexico as part of their long-term strategy. The maquiladoras of today are equipped with advanced technologies, integrated supply chains, and industrially skilled labor to propel the next phase of foreign manufacturing.

The core value of what manufacturing in Mexico provides remains the same, but here are ways it has evolved over the years, and how Mexico shelter services have helped U.S. and other foreign operators find and maintain success.

Skill and Labor

Mexico has invested in the education and training of the industrial workforce. Tens of thousands of engineers graduate every year, and workers of all skill levels are available to fulfill the necessary roles for production. Plus, the cost of labor in Mexico is considerably less than labor rates in the U.S. and China. This has been increasingly important as the U.S. faces a manufacturing skills gap resulting in over two million jobs expected to go unfilled by 2030.

Technology

Automation has become significant in today’s manufacturing role, and maquiladoras are equipped with advanced processes to enhance productivity and efficiency. The integration of artificial intelligence, robotics, and the Internet of things (IoT) keeps operators competitive and on track with meeting market demand.

Trade Agreements

Mexico has 13 free trade agreements with 50 countries including the United States-Mexico-Canada Agreement (USMCA), which provides incentives for trade among the three countries. This is yet another reason why many U.S. manufacturers have moved their production from China to Mexico. Not only is the proximity and labor availability more favorable, the policies are as well.

Tax Incentives

In Mexico, the IMMEX program provides tax incentives for U.S. and other foreign operators. Maquiladoras with IMMEX program certification receive exemption from the 16% value-added tax (VAT) on all temporarily imported goods, materials, and equipment. When partnering with a Mexico shelter company, manufacturers receive this tax incentive from day one.

How Shelter Services in Mexico Support Manufacturers

Manufacturing in Mexico offers several advantages, including the local expertise of a Mexico shelter company. When working with a Mexico shelter company, manufacturers can delegate all administrative responsibilities and focus solely on production. As part of a full suite of shelter services, U.S. and other foreign manufacturers receive:

● Minimized risk and liability

● Reduced costs on labor, infrastructure, permits, and license fees

● Quick start-up times of 3-4 months

● Full control and ownership over production, processes, and equipment

The maquiladora industry has evolved considerably since its inception, and Mexico has recently surpassed China as the top trade partner with the U.S., increasing the region’s competitiveness.

Learn shelter services through IVEMSA can support your production goals and help you grow. Contact our team today.

Sources:

https://nam.org/2-1-million-manufacturing-jobs-could-go-unfilled-by-2030-13743/https://www.trade.gov/country-commercial-guides/mexico-trade-agreements