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Entrada Group Survey: Mexican Automotive Supply Base is Essential, but Quality Concerns Remain

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Entrada Group Survey: Mexican Automotive Supply Base is Essential, but Quality Concerns Remain

Entrada Group Survey: Mexican Automotive Supply Base is Essential, but Quality Concerns Remain

Respondents Concerned about Security, Lack of “Mexico Know-How” and Talent Shortages

April 19, 2016 — While 90% of automotive manufacturers in Mexico believe having a strong, reliable supply base is “very important,” 23% of them rate the quality of that supply base as “poor.” These are two of the key findings of Entrada Group’s report “Mexico’s Automotive Manufacturing — Incentives & Barriers.

While respondents currently lacking Mexico operations are deterred by a broad array of barriers, no single concern dominates, according to the survey findings of Entrada Group — a US-based company that helps manufacturers quickly establish highly productive operations in Mexico.

Other Key Findings Include:

  • 17% of respondents labelled the quality of their local/regional Mexico supply base as “excellent,” suggesting significant room for improvement.
  • 45% of respondents not currently operating in Mexico cited “lack of knowledge about the regions of Mexico” as a main deterrent for establishing operations in the country.

“The benefits that Mexico offers to manufacturers are clear: Competitive wages, growth prospects thanks to an open-trade philosophy, reliable infrastructure, proximity to the U.S., an educated workforce and a growing supplier base. These factors combine to make Mexico a location any manufacturer seeking growth has to consider,” added Doug Donahue, Vice President, Business Development, Entrada Group.

Respondents also indicated they produce for customers from a range of industries, not exclusively within one sector. Mexico hosts a strong network of OEMs and large Tier 1 suppliers across a wide range of industries. In other words, suppliers still contemplating a production footprint in Mexico will find opportunities in many sectors (industrial, aerospace, medical device, etc.).

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