Mexico is a manufacturing country. While many other industries and trades do well in the Latin American country, a large percentage of Mexico’s GDP comes from manufacturing – both for domestic use and for export.
But three manufacturing industries in Mexico stand out as the dominant over all others. These three make up the lion’s share of export values, units produced, and economic activity. In this article, we’ll take a snapshot of each of these three manufacturing industries that Mexico does so well.
Reshoring and nearshoring have replaced offshoring in the past decade or so. Companies eager to minimize risks and shorten time to market have reconsidered their lengthy supply chains. Instead of razor-thin margins and inventories being shipped all around the world, much of the supply chain now occurs in the same geographic region.
And Mexico has benefited immensely from this trend. As the manufacturing powerhouse of the North American trade bloc, Mexico supplies high-skill, low-cost manufacturing for much of the needs of Canada and the United States. But through an impressive array of free trade agreements, Mexico also supplies manufactured goods to much of Europe, Asia, and South America.
As a result, Mexico’s emphasis on manufacturing yields results that are quite impressive. Market forecasts for 2024 predict:
And chief among the manufacturing industries in Mexico are the following three sectors.
Electronics manufacturing in Mexico currently produces the most export value of any sector in the country. In 2021, exported value in this manufactured space exceeded $87 billion USD. The country has been engaged in this industry since the 1960s, and is now the 6th largest electronics manufacturer in the world.
Primarily centered along the border with the United States and the Baja California region, Mexico’s activity in this field extends even to the central region and Mexico City, itself. Major electronics companies like Sony, Vizio, and HP have invested significantly in the country for its numerous manufacturing advantages.
Due to a combination of strict IP protections, intense vocation training, and rapidly modernizing infrastructure, electronics factories in Mexico can produce much of the same technology as Asian factories for not much more cost. These products can reach North American markets much faster from Mexico and for far less in transportation costs.
Probably the most active and robust manufacturing industry in Mexico right now is automotive manufacturing. In fact, Mexico is the 4th largest producer of automotive parts worldwide. Most of the leading automotive brands in the world rely on Mexican manufacturing to produce highly affordable, quality vehicles for global exports. Some of these brands include:
Other notable companies have a smaller, albeit significant, footprint in Mexico, some of which include BMW, Audi, Volkswagen, Kia, and Honda. All in all, Mexico has produced around two million vehicles so far in 2024, alone. And approximately 1.7 million of those were for export. Annual export values for the Mexican automotive sector frequently exceed $40 billion USD.
While not as massive as automotive and electronics manufacturing, aerospace manufacturing in Mexico is still one of the top three primary manufacturing sectors in the country. And the industry produces components, units, and vehicles for all three sectors of aviation: private, commercial, and defense.
What’s truly notable about Mexico’s aerospace manufacturing industry is the sustained rate of growth that typically averages approximately 15%.
Well over 300 of the world’s leading aviation companies invest in Mexican operations to propel their global and regional strategies. Companies like Airbus, Boeing, Beechcraft, and Honeywell all recognize the substantial advantages Mexico’s maquiladora manufacturing infrastructure provides. With a focus on innovation, quality, and cost savings, the Latin American country has much to offer aerospace manufacturers.
These three sectors make up the three most active, most profitable, and fastest growing manufacturing industries in Mexico. Each of them has roots running deep in the Mexican economy and enjoys substantial industry hubs and highly integrated supply chains.
And as the world economy shifts, and manufacturing comes back home to North America, Mexico is poised to ride this wave into the future and leverage current strengths with developing opportunities to become a primary global hotspot for each of these manufacturing industries.