Should Companies Establish Your Manufacturing Operations in Mexico?

Your company has grown to the point where you need to decide where to launch or expand your manufacturing operations. The U.S. and China are the most common options, but Mexico is another country you should consider. Here’s what makes this nation an excellent choice for your production facility.

USMCA Benefits

The most recent U.S.-Mexico-Canada Agreement (USMCA) influences most of the advantages of producing in Mexico. Much of the treaty is identical to the NAFTA agreement, which lifted trade barriers between the nations and promoted foreign investment.

USMCA goes a step further by lowering or eliminating tariffs altogether. It also lays down rules for conducting business between the signatories to provide a more stable relationship. This reduces the risks associated with manufacturing in Mexico.

It Borders the U.S.

There are several ways you can benefit from Mexico’s proximity to the U.S., with easier shipping being one of the most prominent advantages. Truck and rail transportation between the nations is effortless across an unrestricted trade zone. It’s also more reliable than transoceanic shipment, lowering the chances of bottlenecks caused by ports.

Furthermore, Mexico and the U.S. have similar time zones. As a result, real-time communication is easier to accomplish, reducing delays in customer support and other critical aspects.

Skilled Labor Costs

Manufacturing wages in Mexico stand at around $5 per hour. This is significantly less than the approximately $25 per hour in the U.S. It’s even lower than China’s rate, which stands at nearly $7 per hour. Therefore, your labor costs would be minimal if you opened a manufacturing plant in this country.

IMMEX Incentives

The Manufacturing Industry, Maquiladora, and Export Service (IMMEX) program has modernized the environment for manufacturing. Previously known as the Maquiladora Initiative, it offers tax incentives and benefits to organizations producing in Mexico. More specifically, the value-added tax (VAX) is lowered by 16%. There are also significant cost reductions in equipment, tools, and other manufacturing materials.

How to Prepare for Your Mexico Manufacturing

Now that it’s clear Mexico is a favorable destination for your manufacturing facility, let’s see how you can prepare for production:

  • Establish your needs – Clearly defined business needs help you articulate your strategies in Mexico. You can work with your production management partners or manufacturing teams to zero in on your goals.
  • Decide on the right region – Each Mexican region has unique benefits. Figure out the area most suitable for your manufacturing requirements.
  • Get familiar with local laws – Start building relationships and understanding Mexican laws. It will help you stay compliant and ship your products more easily.
  • Communicate – As previously mentioned, Mexico’s time zones enable you to communicate effortlessly with your U.S. partners. Use these channels to streamline your operations.

Prepare Documents for Your Mexico Manufacturing With Copylite Print Accessories

Chances are, you’ll need to do a lot of paperwork to start or expand your production to Mexico. A reliable printer, therefore, is a must-have. And a great way to make it more functional is to revamp it with robust aftermarket products. Copylite has all you need. Head to our web page and discover all the products that can enhance your machine.