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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.

Manufacturing Industries in Mexico

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.

Mexican Manufacturing

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:

  • Value added from manufacturing will reach $131 billion USD.
  • Value added per capita will exceed $1,000.
  • Total manufactured output should reach $400 billion USD.
  • Manufacturing intensity will be 31.2%.
  • Employees currently working in Mexican manufacturing number 3.7 million.

And chief among the manufacturing industries in Mexico are the following three sectors.

  1. Electronics Manufacturing

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.

  • Electronics manufacturing comprises 2.5% of Mexico’s gross domestic product.
  • Electronics spending is forecasted to exceed $1.2 trillion annually by 2032.
  • Electronics account for approximately 30% of Mexico’s total exports.
  • Over 1,100 electronics companies are manufactured in Mexico as of 2023.
  • Mexico’s workforce employed in electronics manufacturing is approximately 330,000.

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.

  1. Automotive Manufacturing

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:

  • General Motors, which made around 414,000 vehicles in Mexico in just the first half of 2024.
  • Nissan, which manufactured 340,000 vehicles in the past six months.
  • Ford, which produced well over 200,000 vehicles there this year.
  • Chrysler, which made over 220,000 vehicles there in the first two quarters of this year.

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.

  1. Aerospace Manufacturing

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%. 

  • Annual foreign direct investment (FDI) reached $5.5 billion USD in 2021.
  • The sector creates approximately 60,000 jobs for Mexicans.
  • Aerospace exports reached $6.7 billion in 2021.
  • Total export value reached approximately $8 billion in 2022.

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.

 

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