Nearshoring to Mexico? Why Monterrey Might Make the Most Geographical Sense

Successfully nearshoring in Mexico starts with establishing the best possible location for production. Operating close to the U.S./Mexico border in areas like Mexicali and Tijuana is the obvious first choice. Due to the proximity to the U.S. market, it helps to reduce transportation time and costs.

However, depending on the sector, it may make sense to move closer to the country’s center. When narrowing down potential industrial sites, Monterrey has become a competitive spot for U.S. and other foreign operators, specifically in the automotive space.

Since many target destinations in the U.S. are located in the Midwest or East Coast, Monterrey is the nearest point in Mexico that has the quality of life, infrastructure, and security manufacturers are looking for. Additionally, with Monterrey’s history as a metal manufacturing hub, there is already a supply chain available that is an added benefit to what nearshoring to Mexico already provides.

As manufacturing leaders consider their next steps, signs are pointing to Monterrey as a potential long-term strategy.

Manufacturing Competition on the Rise in Monterrey

Monterrey is Mexico’s third largest city and has good connectivity to main U.S. airports without the need to drive from the U.S/Mexico border as with facilities in Tijuana and Mexicali. The city is well-known for its technical education and modern amenities, both of which speak to the importance of attracting and retaining qualified labor.

Though it has received recognition on a global scale, Monterrey has been an especially attractive location for U.S. manufacturers in sectors connecting to Texas. Global automotive leader, Tesla, has been particularly prominent in the area as it continues its expansion into Monterrey from its Austin, TX headquarters.

However, other foreign manufacturers have established a base in Monterrey as well. For instance, Chinese operators have built their first North American industrial hub which aids in the transition and expansion of production from China to Mexico.

These types of long-term investments speak to the growth occurring in Monterrey and have identified it as a place to carefully consider when nearshoring to Mexico.

Site Selection and Beyond as Part of Shelter Services in Mexico

Because of the growing base, Monterrey is twice as big as Baja, which makes hiring increasingly competitive. Labor costs are still lower than hiring for industrial roles in the U.S., and partnering with a Mexico shelter company provides an extra strategic advantage.

A shelter company first helps foreign manufacturers secure a building to meet the specifics of their production needs. Once a contract is signed and the building is completed, hiring workers is part of the next phase of a larger scope of administrative responsibilities.

And since shelter services are implemented in parallel to manufacturers handling their production processes, a typical setup time takes only three to four months.

Deciding If Monterrey Is Your Next Move

Nearshoring to Mexico has been a successful strategy for U.S. and other foreign manufacturers for decades. However, Monterrey has more recently been viewed as a preferred location comparable to other prominent areas in Mexico.

For expert guidance on which location is best when manufacturing in Mexico and how shelter services can save you time and money, contact IVEMSA today.

Source:

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