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Beginning in textiles, manufacturing in Mexico has a long and storied history. The Latin American country is now a source for low-cost, high-skilled manufacturing for major producers in the US and across the globe. 

Major industrial hubs have sprung up all along the north region and throughout the country in markets as diverse as specialty plastics and as traditional as metalworking. What began as a few clothing and textile factories along the northern border has since become a major operation making Mexico a leading manufacturing force on the global scene. 

History of Manufacturing in Mexico

When the Bracero Program for sending farm workers to the US ended in the 1960s, Mexico transitioned to manufacturing as a primary economic activity. Through several cooperative trade agreements, the US and Mexico helped create a growing industry based on manufacturing for export. As a result, recent decades have seen a steady increase in assembly and skilled manufacturing in Mexico. 

What began as simple assembly now includes increasingly sophisticated manufacturing for incredibly diverse and complex niches. And as Mexico continues adapting, the country’s involvement in manufacturing is growing. 

  • Mexico’s academic institutions now partner directly with industry to create specialized programs for training the future workforce. 
  • Mexico’s government has invested heavily in key infrastructure objectives to benefit manufacturing.
  • Mexico’s modernization now offers foreign investors cutting-edge industrial parks and factories.
  • Mexico’s diplomatic efforts have brought about trade relations with all the major global markets.

Common Ways to Manufacture in Mexico

Foreign producers wanting to plug into this vibrant manufacturing economy have a few popular methods of going about it. The most common include:

Joint Venture: a foreign company can partner with a Mexican company to utilize their operations south of the border, which can be complicated or challenging due to different visions, cultures, etc.

Contract Manufacturing: Early-stage or growth-stage companies with an existing product can simply and easily place an order with a contract manufacturer in the country for products to certain specifications.

Wholly-Owned Subsidiary: large, well-established manufacturers may opt to purchase outright or establish a Mexican company wholly owned by the parent company to pursue its manufacturing objectives in Mexico; however, this is a long-term and expensive option that rarely benefits smaller, less flexible organizations. 

Shelter Service: manufacturing in Mexico is greatly simplified with this option, which allows a foreign company protection from regulatory and bureaucratic hassle and risk by partnering with a shelter company that handles import/export, hiring, site selection, etc.

Mexico’s Major Manufacturing Industries

Mexico may have started with textiles, but the country has grown rapidly in the past half century to now compete in virtually every manufacturing market. Some of the primary areas of Mexican manufacturing include:

Aviation and Aerospace

Aerospace is without a doubt one of the key industries currently manufacturing in Mexico. And the country is projected to be in the top ten aerospace exporters globally by 2026 as growth in the sector intensifies. 


Mexico is currently the 7th largest automotive producer in the world, and 5th largest producer of auto parts. According to the USMC, as long as at least 75% of the product is made in North America, the finished product may be exported duty-free. Major automotive brands operate in Mexico, such as Ford, GM, Nisson-Daimler, BMW, Toyota, and more.

Medical Devices

As technology evolves, so does the need for highly sophisticated medical device manufacturing like that in full swing south of the border. Medical device manufacturing accounts for 70% of all Latin American medical device exports and averages over $11 billion USD in annual sales. 

Other vital manufacturing segments growing in Mexico include:

  • Electronics
  • Molding
  • Furniture
  • Machining
  • Millwork
  • Cosmetics
  • Retail packaging
  • Machine learning
  • Energy storage
  • Consumer products

Key Manufacturing Regions

Manufacturing hubs may be found throughout Mexico, but the two most active regions are generally along the northern border and to a lesser extent in the center of the country. Some of the most advanced manufacturing hubs are in border-region cities like:

  • Tijuana: the largest city in Baja California, Tijuana boasts over 50 million border crossings a year and one of the most technologically advanced manufacturing hubs in North America.  
  • Tecate: in spite of being a border city in Baja California, this city offers manufacturers a very stable workforce, as most of the 100,000+ residents having roots in the city. 
  • Rosarito: a resort town along the Pacific, this city is also a major hub for electronics manufacturing, automotive manufacturing, and medical device manufacturing. 
  • Ensenada: as a cargo port on the Pacific, this city is highly strategic for access to Asian markets as well as the US, located just 60 miles away. 
  • Mexicali: with modern infrastructure and secure industrial parks, the city has become a hub for large industrial manufacturers.

Mexico’s Economic Outlook

While manufacturing in Mexico has on average grown from decade to decade, there is no denying the contraction that occurred due to the recent global crisis. Private spending in consumer markets decelerated, and uncertainty with USMC also contributed to the slowdown. 

However, post-pandemic, Mexico’s economic outlook remains positive. Trade relations with the US have normalized. Vaccine rollouts have eased financial markets. And already, key industries like automotive and consumer products are rebounding. In light of these signals and past trends, analysists predict that Mexican manufacturing is set to rebound quickly. 

And just as Mexico has given foreign manufacturers the advantage they need to increase market share and competitiveness over the past decades, the future looks equally promising. New investment continues to pour in, and Mexicans are getting back to work. This Latin American country will continue to exhibit a pattern of growth and innovation as a partner of choice for manufacturers around the globe.


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