Manufacturing Companies Moving to Mexico: How, Why and the Costs of Nearshore Production

For more than 50 years, global manufacturing companies that need higher-value sourcing solutions have been attracted to Mexico.

Why?... Convenient proximity to the U.S. with strategic locations for well-suited operations and easy travel; a bilingual workforce with a large pool of highly educated and skilled operators or engineers; and world-class logistics & infrastructure with access to supply and new markets, ready to receive global companies of any size.

Because of these advantages, when US or global companies are looking for options to expand, relocate, or set up a new manufacturing plant, they know that Mexico is the answer. So, they make it happen by consulting and working with Shelter Manufacturing Companies in Mexico such as CPI, their professional and qualified partner with decades of experience doing business in Mexico and with expertise in a wide array of industries.

HERE ARE THE THREE METHODS COMMONLY USED BY GLOBAL COMPANIES TO START MANUFACTURING IN MEXICO:

Mexico Shelter Services: Maquiladora Program

Benefit from years of experience and knowledge of the Mexican market while fully controlling your operation and quality without legal exposure and minimal capital investment. Shelter companies in Mexico, like CPI, take care of everything so you can focus on your core manufacturing process! We handle all tasks and functions, form scouting the best location for your facility to managing day-to-day administrative duties in compliance with Mexican regulations. Learn more about being sheltered by CPI!

Independent Corportation Program under a Shelter Company

This program will enable you to own your Mexican entity while still enjoying the benefits of working with a Shelter Company to manage the succesful establishment and ongoing administration of your Mexican production facility. Establishing a wholly owned corporation in Mexico is a complex endeavor, but CPI has the experience you need to help you navigate these new waters, from labor law, human resources, payroll and benefits management, to customs law, logistics, import/export operations, and accounting. We make initiating operations in Mexico easy for you. The only difference between this program and the Shelter Program is the timeline and the liability for the operaiton. You own it we manage it.  Learn more about starting a standalone operation in Mexico.

Contract Manufacturing Program

If it’s not the right time to make a capital investment in a Mexican manufacturing facility, contract manufacturing or subcontracting is the best option for you. With this program, CPI will act as your matchmaker and help you find a true contract manufacturer or subcontractor in Mexico that is the right fit for you. We will make sure the contractor you select is capable of meeting and maintaining your company’s quality standards. Learn more about how CPI can help you with contract manufacturing.

COSTS OF SETTING UP A MANUFACTURING FACILITY IN MEXICO

There are various costs to consider when establishing a manufacturing facility in Mexico. However, costs in Mexico are lower than the U.S., Canada and many parts of the world. CPI has the skills, location knowledge, and supply-chain partnerships to provide you with a thorough cost analysis so your company can free up capital to invest in core manufacturing functions. Here’s some criteria to consider:

• Labor Costs. Mexico's abundance of highly-skilled, low-cost workforce allows you to reduce labor costs while maintaining your high-quality standards. For example, the average labor rate for an entry level basic assembler is of $2.50 USD fully burdened. Additionaly the work week in Mexico is of 48 hours vs 40 hours in the U.S. allowing you to increase production output by 20%.
• Logistics & Transportation Costs. Proximity to the U.S. reduces time and cost to ship components, provides just-in-time product transportation, and makes business trips quick and easy.
• Industrial Real Estate Costs. Average industrial real estate leasing rates in Mexico depend on location and other factors. CPI will find the best rate for you.
• Exchange Rate Savings. The U.S. Dollar to Mexican Peso exchange rate will highly favor your company when buying goods and services in Mexico to support your manufacturing operation. Today the peso is on average $18.50 to the dollar.

Learn more about costs of manufacturing in Mexico.

Ready to take the first step to set up your Manufacturing Facility in Mexico? Request a free cost analysis!