High-Tech Manufacturing Key to Mexico’s Growth

Commentary by Doug Donahue

Mexico is hot in the news these days. Such as this piece on PRI’s “The World,” which looks at how far Mexico has come since 1967, when Volkswagen first started producing cars there, to now – Mexico is the world’s fourth-biggest auto exporter.

It isn’t just plentiful, low-cost, highly skilled labor that attracts the big OEMs like Volkswagen, however. Mexico is also a platform for worldwide export, with a 20-year history of free trade agreements. The country currently has 44 free trade agreements with 12 countries around the world – more than any other nation. This means many countries can not only export from but also import into Mexico at a very low rate.

Thus Mexico is becoming a crucial hub in the global supply chain for multiple sectors: automotive (both high- and low-end vehicles), aerospace/aviation, medical devices, consumer electronics and others. To maintain their position, the government must ensure an adequate supply of well-trained talent – engineers, technicians, IT professionals. So far, the country has done a good job of this, giving it an advantage over other low-cost manufacturing centers.

Of course access to talent is a very local game, in Mexico or any other country. That makes site selection very important, as you need to understand the characteristics and personal/professional drivers of the potential employees living in the region where you will base your operations.

When considering where to establish and run your Mexican operations, go with an advisor and partner that has a long track record in a region – such as Entrada Group, which has been a shelter operator in central Mexico for more than a decade.

Source: PRI’s The World

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