Choosing Wisely: Strategic Site Selection in Mexico's Manufacturing Boom

In this episode of Tetakawi’s 'Manufacturing in Mexico' Podcast, host Ricardo Rascon is joined by industry expert David McQueen to delve into the dynamic growth of Mexico's manufacturing sector. With Foreign Direct Investment (FDI) in the sector reaching $19.1 billion in 2023, up significantly from previous years, the duo explores the burgeoning opportunities and emerging challenges in site selection for manufacturers looking to expand into Mexico. Key Highlights: Growth Drivers: David McQueen sheds light on the factors propelling Mexico's manufacturing sector, including lower costs compared to China, advantageous logistics due to the common border, ease of doing business, and a skilled workforce. Capacity and Challenges: Despite the sector's rapid expansion, McQueen discusses the increasing difficulty in launching new facilities, especially in popular manufacturing locations. He highlights the challenges of higher real estate costs and manpower shortages, particularly in areas like Tijuana and Monterrey. Advantages of Mexico's Workforce: The episode also touches on Mexico's unique position in the global labor market, with its organic population growth and deep industrial experience, providing a somewhat advantageous situation despite global manpower issues. Emerging Locations: McQueen offers valuable insights into less popular or new manufacturing locations within Mexico that present viable alternatives to the more established industrial regions. He discusses the relative benefits of cities like Torreon, Hermosillo, Queretaro, Mazatlan, and Merida, considering factors such as labor availability, industrial base, and logistics. Location Strategy: The conversation concludes with strategic advice for companies considering manufacturing in Mexico, emphasizing the importance of selecting a location that aligns with the company's critical success factors. Closing Thoughts: Ricardo and David wrap up the episode by stressing the critical nature of location decisions in the success of manufacturing operations in Mexico. They highlight the importance of thorough research and consultation to navigate the complex landscape of Mexico's manufacturing sector effectively. Stay tuned for future episodes of our 'Manufacturing in Mexico' Podcast as we continue to explore the intricacies of Mexico’s manufacturing industry and provide you with the insights you need to make informed decisions about your expansion into Mexico.