Nearshoring to Mexico: A Golden Opportunity for Auto, Packaging, and Electronics.

The nearshoring wave is bringing incredible opportunities for companies looking to streamline their supply chain and save money on their operations. This is what you need to consider if you want to take advantage of this opportunity in the automotive, appliances, and packaging industry.

Since the beginning of the pandemic in 2020, more American companies started to look in Mexico's direction to bring their supply chains closer to home. This is a logical step, as nearshoring has many benefits, such as lower cost of labor, shorter supply chains, beneficial free trade agreements, and business infrastructure, among others.

The immense growth of this trend is reflected by exciting recent milestones. In October last year, trade via the land port of Laredo, TX exceeded that of the seaports of Los Angeles and Long Beach combined, a clear sign of changing times for global freight. We are bullish about what this means for the future of US-MX trade relationships

For several industries, this is especially relevant due to the significant investments that want to add their operations to Mexico soon, around 450 companies according to Excelsior. These are the top things to consider when nearshoring to Mexico:

Creating a tight-knit supply chain with different suppliers is nothing new for the automotive industry since they are already used to having car parts cross the border between the US and MX 7 to 8 times before they are even added to the assembly line and a finished product. This will become more and more relevant to other industries such as electronics and appliances since Mexico is stepping up its ability to manufacture more sophisticated appliances such as the top-of-the-line Bespoke Infinite Line Refrigerator manufactured by Samsung at the end of 2023. 

Infrastructure and capacity, earlier this year Tesla announced their plans of building a new manufacturing plant in Monterrey, Mexico, which in turn has made some of their suppliers look to Mexico to start the process of acquiring their own tracts of land in order to build their own manufacturing plants. Mexico’s trade agreements with the USA and Canada have given a privileged opportunity for companies to bring their future operations to Mexico in order to service the North American market, but, let's not forget that 60% of the companies that want to invest in Mexico come from Asia.

Increasing opportunities and a growing ecosystem, Morgan Stanley expects Mexico’s exports to rise by more than 150b in the next 5 years. A maelstrom of competition, growth, infrastructure, and opportunities is coming to Mexico from foreign investment opportunities. All in all, this will impact every single industry from packaging, and appliances to automotive. At the end of the day, the quality of Mexico’s logistic industry will be a priority and become top of the line due to the sheer size of the investment that is to come in the next few years.  

The opportunities that nearshoring is bringing to automotive, appliances, and the packaging industry are abundant, so don't let them pass you by.        

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