Manufacturing in Mexico - NAPS - News & Information

Auto Production in Mexico

May 23rd, 2013

Automobile manufacturing in Mexico has increased 16% for the month of April. The Mexican Automobile Industry Association (AMIA) said that they have reached a new April record with 238,766 vehicles. Along with the production increase, exports rose 2.8% and exports to the United States rose an additional 3.8% compared to the same period last year.

Another growth area was auto sales within the home. In April there were 83, 527 units, rising 20% in comparison to last year. There was a slight drop in March, which is due to Holy Week according to Eduardo Solis (AMIA President), however the remaining four months of 2013 had positive numbers with an increase of 5%.

Many automakers are beginning to expand into Mexico, with companies like Audi, who is planning on manufacturing 4 SUVs by 2020, and Honda who will invest $470 million into manufacturing in Mexico. Not only are these two well-known names claiming residency in Mexico, Chrysler has also seen the benefits of manufacturing in Mexico and will soon begin manufacturing the Fiat at its plant in Saltillo, Mexico.

Mexico continues to set auto production records, especially with the growth and expansion. “With numerous free trade agreements, a cheap, well-educated labor force, and proximity to the lucrative U.S. auto market, combined with growing demand in South America, automakers have been lining up for two years to set up shop in a country that could eventually overtake Brazil, Latin America’s biggest economy” says Reuters. Last year Mexico was an attractive location for automakers bringing in $3.7 billion in investments, and seems it will continue to stay on that path.

British Government Sees Opportunity in Mexico

May 17th, 2013

The number of British government initiatives in Mexico points to the high degree of confidence that the UK has in the Mexican economy.

For example, in April this year the UK’s ambassador to Mexico, Judith MacGregor, met with Tijuana mayor Carlos Bustamante Anchondo to discuss ways to build more jobs, widen business relations between the two countries and prepare Tijuana for foreign manufacturing in Mexico investment.

During the meeting, Bustamante Anchondo said Tijuana is experiencing significant economic growth and decreasing crime rates. The city has ambitious plans for urban development and is working directly with the United States on immigration issues. The mayor said that numerous companies dealing in medical care, technology, research and development, and the aerospace industry had decided to locate to Tijuana. Manufacturing in Mexico is expected to increase significantly.

Ambassador Macgregor said that Tijuana’s strategic location would help attract foreign investment. “Currently there is a good perception of Mexico and its borders, compared to the past. Now Mexico is seen as an optimum place to invest and it has a highly trained workforce.” The maquiladora industry will most likely benefit.

Mexico is a growing market, the 7th largest in the world. Recently MacGregor met with representatives from the Cambridge Weight Plan, a UK company offering clients help with weight loss, general health and nutrition. MacGregor said that the Cambridge Weight Plan had the highest level of approval from UK Trade & Investment (UKTI), a government organization that helps UK companies establish a global presence. The Cambridge Weight Plan is well-poised to enter Mexico’s dynamic and expanding market…

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Motivated Vision for Mexico

May 8th, 2013

Mexico’s economic revival is certainly being recognized globally. Antonio Garaza of World Politics Review, demonstrates how Mexico will sustain this trend in the years to come.

An “open economy” is one driving force in the success of Mexico’s growing economy. Mexico’s economy has a competitive edge, and is open (in comparison with other economies) with its largest factor being trade, 63% to be exact. Mexico’s export output alone equates, “to the annual value of exports by the rest of Latin America put together” according to Garaza.

The 12 free trade agreements Mexico shares with 44 other countries only aids to its relationship with foreign investors. Mexico has strategically placed itself as a credible player within the global spectrum. Mexico is driven not by the pursuit of ideologies when approaching trade alliances, Garza explains, but they are able to strategically focus on economic policy and geopolitical interests.

Mexico’s recent work at building a strong, competitive economy has proven to be positive, with numbers to back it. Within a decade, Mexico had 17 percent of the population join the middle class. The middle class is currently compromised of a youthful, well-educated portion of citizens that are growing at a rapid pace. As the middle class continues to grow, “ it signifies not only the possibility of greater economic development as its members continue making gains, but also a more stable democracy as they seek to protect those gains” Garaza notes.

Many countries from Europe and Asia are now looking towards Latin America for investment, mainly Mexico. It is a current driver for North America as it holds powerful core values and has a strong record of promoting trade and investment.

Juarez Crime Declines, Economy and Manufacturing in Mexico Improving

May 1st, 2013

After years of violent crime and instability, Juarez, Mexico is at last beginning to enjoy the return of peaceful times. Last year, 2012, was a turning point for Juarez. The economy is reviving, residents are feeling safe, and businesses and investors would be wise to consider opening operations in Juarez. Manufacturing in Mexico is bustling and promises to thrive for years to come, and Juarez is ideal for its central location, inexpensive real estate and highly trained labor force.

The city of Juarez has gained negative attention worldwide for its violence and drug cartel activity. Juarez has become infamous as the murder capital of the world, amid harrowing tales of turf wars between drug cartels. This notoriety has prompted law enforcement and civic organizations to cooperate and produce real change.

Maquiladora manufacturing plants account for 60% of the jobs in Juarez, and commerce between Juarez and El Paso, Texas has historically worked in productive partnership. Today, Mexico’s economy is recovering very well, and businesses, particularly manufacturing companies, are once again looking to Juarez for a low-cost manufacturing solution. Companies that had shuttered are returning, and new companies are much more willing to consider Juarez than was true a few years ago.

Manufacturing in Mexico today, including Juarez, is safe, credible and growing. The population is young and well educated, with an average age of 27. In fact, Juarez has the highest literacy of any city in Mexico.

After years of avoiding the streets, except when necessary, locals now celebrate a return to normalcy.

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“Made in Mexico”

April 29th, 2013

The term “Made in Mexico” is quickly becoming better acquainted with the automotive industry manufacturing in Mexico, in comparison to its former relationship to low-skill, high volume production of textiles.

Mexico has made a tremendous turn around within the last decade in regards to manufacturing. They have gained support with their North American counterparts through import and exports and with a new government in place looking to gain annual growth through recent economic reforms.

Central states occupy high-tech manufacturing, not only in the workforce but in educational fields as well, which draws in foreign investors. They overlook the harsh stigma Mexico has received over the years and view Mexico as a quality investment.

The automotive manufacturing industry is dispersed across Mexico, with a growing concentration in Guanajuato and Aguascalientes. These states, as well as other regions, enable automotive manufacturing to illustrate Mexico’s growing potential and have items “Made in Mexico” as a credible venture.

Popular automakers such as Volkswagen, Nissan, Honda, Mazda and Audi are all building plants that will only aid to this growing industry.

With the automotive industry in Mexico growing, skilled workers are in high demand and will often jump from high affiliated institutions. There is a large surge of students that are obtaining secondary schooling with the aim of graduating from a technical school or earning a degree to keep up with the demand from manufacturing in Mexico. Chances for employment increase for these graduates as they enter the workforce, particularly with regard to Mexico manufacturing.

There are various components that compromise the credibility of “made in Mexico”. Both its manufacturing field and abundant pool of educated graduates have helped mold its changing image.

Manufacturing in Mexico Steadily Rising

April 23rd, 2013

Mexico manufacturing has gained a competitive edge over many other low-wage manufacturing countries. Though it is often viewed in a negative light, due to the attention brought by drug violence, manufacturing in Mexico is a key factor in changing this image and showcase Mexico as a trustworthy investment.

Mexico’s recent success, over its long time competitor China, is largely driven by wage inflation in China and Mexico’s business friendly programs, such as IMMEX (or formally known as the Maquiladora Program). Also, Mexico currently participates in 12 free trade agreements that involve 44 other countries. NAFTA being one of its biggest acts has boosted Mexico’s economic productivity, in regards to manufacturing in Mexico, due to its close proximity to the United States and Canada.

Mexico’s appeal comes from other sources, too. It is one of few manufacturing countries that offer shelter services, which can enable foreign investors to enter into Mexico with no legal liability and gain access to immediate knowledge about how to operate in Mexico. A good shelter company will provide 100% of the administration and compliance management at the factory so the manufacturer can focus on production and quality control. Typically the functions handled by the shelter company are human resources, accounting, import/export and environmental, health & safety. Some shelter companies, such as North American Production Sharing (NAPS), offer additional services that include sourcing, technology and more. A reputable shelter company can truly make manufacturing in Mexico a seamless process.

North American companies are acknowledging the benefits of manufacturing in Mexico and noting the simplicity of doing business with their neighboring counterpart.

Mexico Going Green

April 19th, 2013

Mexico is continuing to move forward with its “Go Green” movement by implementing solar panels throughout public schools. Mexico has made tremendous progress with attracting solar companies for manufacturing in Mexico strides and now the country is focusing on renewable energy and its relationship with education and other public forums. The Mexican Congress has recently approved amendments where the renewable energy bill will help further the installation of solar panels within public schools. With domestic demand for solar panels continue to rise in Mexico, foreign solar companies manufacturing in Mexico for exportation to the United States might realize a new revenue stream by selling locally.

Mexico continues to be a leading figure within the renewable energy circuit. They are the second country to take a stance in changing the global climate. A year ago, Mexico announced its new position of leadership, along with the United Kingdom. The country, and its government, passed a bill that is said to eventually cut the growth on emissions by 30% by 2024 and reach its ultimate goal of 50% by 2050. This is in addition to Mexico’s already strict environmental laws for companies manufacturing in Mexico.

Mexico is taking a stride, with the rest of Latin America (such as Bolivia and Peru), and not holding back on this global issue. This new energy bill will allow Mexico to be a leader for the battle against climate change. This movement does not only aid to the march for clean energy and decrease of gas emissions for the global climate but also create a positive outlook for families across the country. There will be a balance of energy sales from rural communities, “that will sell the surplus energy to the rest of the municipality,” according to PVPulse.com. This ultimately means the cost of energy will become cheaper in Mexico, which could assist the private sector and companies manufacturing in Mexico.

The Medical Device Industry Has a Clean Bill of Health

April 11th, 2013

Medical device companies manufacturing in Mexico continue to exhibit steady growth with no sign of a slow down in sight. As costs in the United States and Eastern Europe continue to rise, especially with the implementation of “Obamacare” and its direct impact on medical device companies, more organizations are considering manufacturing in Mexico as a viable solution.

No other place in Mexico is this more evident than in Tijuana, where they now claim the largest concentration of medical device companies in all of North America. The ability to provide both timely deliveries and consistently high quality products are a few reasons why medical device manufacturers are choosing Mexico. Also, there is a tremendous base of talented labor with experience in medical device, automotive, electronics, aerospace and other sophisticated industries to support the growth of manufacturing in Mexico. Furthermore, the labor laws in Mexico provide companies much more flexibility in terms of compensation, scheduling and seasonality, which plays an important roll on profitability.

Another factor drawing medical device manufacturers to Mexico is the government’s enforcement, and employee’s respect, for intellectual property. Unlike many other low-cost manufacturing countries, Mexico is known for its low piracy rates, which cost companies billions of dollars a year.

One of the challenges facing these companies is understanding the business landscape and culture in Mexico, which is why many of these firms are choosing to outsource their administration and compliance management to shelter companies. A good shelter company will handle 100% of the administration, including Human Resources in Mexico, Payroll in Mexico, Accounting in Mexico, Import/Export in Mexico and Environmental, Health & Safety in Mexico, allowing the manufacturer to focus on production and quality control. “We are receiving a record number of inquires from medical device manufacturers around the world who want to explore Mexico as a competitive solution,” said Scott Stanley, Sr. Vice President of North American Production Sharing, Inc. (NAPS), Tijuana’s largest and most sophisticated shelter service provider. “NAPS guides these companies through the process of feasibility by providing all the facts and figures about expanding into Mexico so sound business decisions can be made. Thereafter, we essentially become partners and typically work together for many years.”

With an increase in demand for medical device products, not only in the United States but also within Mexico’s public health sector, Mexico will continue to be the primary choice for medical device manufacturing.

Aerospace Manufacturing in Mexico Continues to Grow

April 10th, 2013

Mexico could not have picked a more opportune decade to welcome and recognize Aerospace manufacturers. The aerospace industry is eager to continue manufacturing in Mexico and expand aggressively.

Aviation Week announced that Mexico’s attractiveness derives from its lower wage-structure and the country, “aggressively pursing high-tech aerospace jobs as part of a broadening of its industrial base beyond automobiles and electronics” (two already popular industries for manufacturing).

The aerospace industry is now 270 factories strong and is continuing to grow. As a country that was previously known for its agricultural exports, it has proven to stay on pace with global manufacturers, with industrial parts being 90% of its export earnings. It is currently ranked number 13 as the world’s largest economy and maintaining the number 11 spot for purchasing power.

The aerospace is not a new industry to Mexico. Its residency dates back to the mid 1970’s, when basic parts were sent across the border (mainly Tijuana and Mexicali due to its close proximity to the U.S.) for assembly and research in the field closely following.

NAFTA and political reform are key components to the aerospace industry’s growth within the last decade. Aiding to this would be its ideal location for trade and close connections with the United States. The potential growth for companies looking to manufacture in Mexico is incomparable to manufacturing in other places like Europe or even the United States. Manufacturers are able to go from nothing to 75,000 square foot factory space within a few months, something that is difficult to achieve elsewhere.

Behind the scenes in all of this success are service providers that foreign manufacturers turn to. Shelter services, like North American Production Sharing, allow companies to run business at a regular pace, while the shelter provider handles all the administration and compliance management required under the IMMEX (previously known as Maquiladora) program.

Manufacturing in Mexico: Human Resources

April 2nd, 2013

Manufacturing in Mexico has greatly increased as companies have expanded their global footprint into Mexico. The strategic plan to operate these facilities must include an investment in Human Resources in Mexico that ensures recruitment of qualified candidates, equitable compensation practices, compliance with local regulations and minimal turnover.

North American Production Sharing, Inc. (NAPS) is the leading outsourced administration and compliance management company in Mexico, specializing in employment administration, accounting, import/export and environmental, heath & safety, allowing corporate management to focus their efforts on production and quality control.

Manufacturing in Mexico requires strict adherence to laws and taxes, and the price of noncompliance is steep and swift. Late payment of taxes, failure to present monthly statistics reports and neglecting to file required tax returns online will result in fines, fees, surcharges and back taxes. The Mexican Social Security Institute, the governmental organization that collects social security for the workforce, requires detailed quarterly reports that include monthly payroll data and employee training and job information. Companies must keep an updated registry of employment activities and report risks. Outsourcing to a team that has expertise in governmental regulations and the ability to manage deadlines is the HR solution to avoid sanctions and work suspensions.

The successful deployment of Human Resources in Mexico hinges on partnering with an organization committed to the confluence of the company’s workforce culture. NAPS’ HR professionals are skilled in screening, interviewing, conducting reference checks and testing. Specialists assess whether or not the candidate is qualified and likely to acclimate to the work environment and company mission. The client conducts interviews and makes the final decision. Once the prospect is hired, NAPS conducts new hire orientations and manages the administrative details in accordance with local regulations and company policy.

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