Mexicali for Nearshoring. We are the best bet in Mexico.
The nearshoring boom in Mexico has continued to grow in the last decade for several reasons. First, the ongoing trade conflicts between the United States and China have led to uncertainty regarding the price and quality of production, as well as concerns about intellectual property protection.
On the other hand, Mexico offers an increasingly qualified and obviously cheaper labor than labor in the United States.
In recent years, an upward trend has been observed in American companies, in which workers with several years of seniority are starting to retire and millennials do not seem to be interested in working in factories, leading to an increase in labor costs. U.S. companies still rely heavily on labor to deliver the products their customers want, and this can cause some problems.
One of the most cost-effective solutions today is to increase the amount of work done in Mexico; in other words, Nearshoring to Mexico.
Mexicali for Nearshoring. American Companies Here.
In Mexicali, several U.S. companies have established operations as part of nearshoring strategies, taking advantage of benefits such as geographic proximity and favorable trade agreements under the USMCA. Some of the prominent companies include:
Honeywell. This company has a long history in Mexico and has established a plant in Mexicali that focuses on aerospace components (Nearshore).
Skyworks Solutions. A leading semiconductor manufacturing company, which has expanded its operations in Mexicali to take advantage of proximity to the U.S. market.
Gulfstream Aerospace. This manufacturer of business jets has also found in Mexicali a strategic location for some of its manufacturing operations, driven by the quality and skill of the local workforce.
Rockwell Automation. With a significant presence in Mexicali, this company is dedicated to the production of industrial automation systems and solutions.
UTC Aerospace Systems. This company, which is part of United Technologies Corporation, operates in Mexicali manufacturing advanced aerospace systems.
Newell Brands. Known for consumer products, this company takes advantage of Mexicali’s logistical advantages to distribute its products efficiently throughout North America.
Smiths Group. Company dedicated to the production of specialized technology, including components for the health and energy sectors, with operations also in Mexicali.
Intuitive Surgical. This innovative medical technology company has operations in Mexicali, where it produces advanced components for its robotic surgical systems.
Collins Aerospace. A key player in the aerospace industry, with operations in Mexicali focused on the production of aircraft components and systems.
Textron Systems. This company, which offers a variety of products for defense and aviation, has also established operations in Mexicali due to its strategic location and the benefits of nearshoring…
Not only do these companies benefit from being closer to their core markets, but they also take advantage of the local talent and favorable manufacturing conditions that Mexicali offers.
Mexicali for Nearshoring. European Companies here.
On the other hand, some non-U.S. international companies have established themselves to take advantage of nearshoring. Although specific information on non-U.S. companies in Mexicali is limited, I can highlight a few international companies that have shown significant interest in nearshoring in Mexico in general, which could include operations in Mexicali given its industrial appeal:
Siemens (Germany). Siemens has been active in Mexico and has invested in high-tech sectors, which could include manufacturing operations in strategic regions such as Mexicali.
Bosch (Germany). Bosch has a strong presence in Mexico and has expanded its manufacturing operations, especially in the areas of advanced technology and automotive components.
Schneider Electric (France). This global energy management and automation company has expanded its operations in Mexico, taking advantage of its proximity to the United States.
Nestlé (Switzerland). Nestlé has made significant investments in Mexico, expanding its production capacities in response to the nearshoring strategy.
Philips (Netherlands). Philips has sought to take advantage of nearshoring by establishing manufacturing operations that could benefit from Mexicali’s strategic location.
These companies are in sectors ranging from advanced technology and electronics to food and consumer goods, reflecting the diversity of foreign direct investment in Mexico due to the nearshoring strategy.
Mexicali for Nearshoring. Why?
Mexicali has several significant advantages that make it an ideal choice for international companies looking to establish themselves in Mexico with the aim of selling products or services in the United States and Canada:
1.- Geographic proximity to the United States. Mexicali is located on the border with California, which facilitates quick and direct access to the U.S. market. This proximity significantly reduces transportation times and costs, which is crucial for logistics efficiency and rapid response to market demand.
2.- Skilled Labor and Competitive Labor Costs. Mexicali has an educated and technical workforce, benefiting from local education and training programs that are aligned with the needs of modern industry. Labor costs in Mexicali are significantly lower than in developed countries, allowing companies to optimize their production costs while maintaining a high level of quality
3.- Favorable business environment and political stability. Mexico, and in particular Mexicali, offers a stable political and economic environment that is conducive to foreign investment. The existence of trade agreements such as the USMCA between Mexico, the United States, and Canada further facilitates business operations and offers legal protections for cross-border investments and trade operations. These treaties allow preferential access to markets, reducing trade and tariff barriers.
These characteristics make Mexicali a strategic destination for nearshoring, allowing international companies to effectively serve North American markets while taking advantage of the competitive advantages offered by Mexico.
Mexicali for Nearshoring. We welcome You.
Nearshoring is affecting Mexicali’s economy in a very positive way and we are not going to stop competing with other Mexican states for a piece of the nearshoring pie. We have what it takes to get companies to come here.
So far, Mexico has seen some encouraging results.
In the first nine months of 2023, foreign direct investment (FDI) linked to nearshoring spiked 47% compared to the same period in 2022 — namely investment directed to sectors like automotive production, pharmaceutical products and semiconductors, among others with ties to global value chains.
That performance compares quite positively with the minus-27% year-over-year decline seen in FDI flows directed to other areas of the economy, such as the telecommunications and financial sectors.
Foreign investment directed to automobile and truck manufacturing — the largest nearshoring-related sector in the country — increased by 68% during that period. For activities related metal ore mining, also integrated into global value chains, FDI inflows almost tripled.
The country has also had a high number of new investment announcements: since the beginning of 2021, just when nearshoring was beginning to gain traction, over a hundred new investment projects associated with it have been announced in Mexico, with a total estimated investment of more than US $30 billion.
Even if some of them fall through — currently, about 43% of those projects are still in the announcement stage — six out of every 10 projects are either already operational or under construction.
Large investment sums are expected to continue to arrive in the coming years. It would seem, then, that we’re capitalizing on the opportunity.
If you are looking for industrial land, office spaces or commercial premises for your business, contact us and we will help you quickly find the property your company needs. We are well acquainted with the local commercial and industrial market and have properties at good prices, some of which are not published in the online media.
Would you like to have more info on Mexicali? We invite you to visit this page where you can gather a lot of data about this city: «Data Mexico: Mexicali Profile»
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Another article from this blog that may interest you: “Invertir En Bodegas En Mexicali: 3 Grandes Razones”.
