What country has enhanced its position in global manufacturing and design for appliances to aircraft parts? Mexico. Surprised?
In the past Mexico, has had troubles competing for business development because of the lack of standards met for international competitiveness, but things have changed.
An Increased Ability to Compete Globally
Since 2009, Mexico has boosted its ability to compete by studying successful models in Europe, Asia and the US. Local governments have collaborated with universities and private industry to upgrade their research and development, customer service, and train their workforces. For example, Mexican exports of aerospace products have almost tripled to three billion US since.
Queretaro is now a production and engineering center for General Electric and Bombardier.
Mexico’s Fiscal and Monetary Policy
Mexico can absorb global shocks since its maturation in fiscal and monetary policy after the 1994 financial crash. IMF (International Monetary Fund) worked with Mexico to adopt stricter standards of monetary policies. One of the basic rules is for member countries not to print more money to control inflation.
Mexico should also benefit from a change in thinking of US manufacturers who have relied on Asia and now are re-evaluating staying in North America for its production plants.
Cost of transportation is just one of the concerns; the time delay for delivery also affects what money is tied up in inventory.
In Mexico, US companies can better control their day-to-day operations if they are closer, as well as, be less concerned with piracy, failure of quality standard, and contamination of products.
Mexico’s violence in the drug war is mostly related to specific groups. This concern is not as scary to manufacturing companies as disease outbreaks in China, policy shifts in Moscow, or riots in South Africa.
Technology Sector in Mexico
The electronics sector: Beijing’s Lenovo division (purchased from IBM) opened a manufacturing plant in Monterrey to produce up to 5 million PC’s a year. An electronics manufacturer from Florida has more than doubled its staff to 8,000 at its Guadalajara plant. Taiwan has expanded its Mexican factories in electronics manufacturing. US companies such as Skyworks Solutions from Massachusetts moving to Mexico to manufacture semiconductors for mobile phone and PDA’s.
The high-tech industry should take off in Mexico because of the lower cost of wages, including benefits, compared to China. There is opportunity in crisis.
Why Go to Mexico:
- There is less technology theft, travel costs, quality issues, and delays due to miscommunication.
- Skill levels are up from collaboration between state schools and industry.
- Wages and rents are more attractive compared to cost in the rest of North America or China.
- Shipments arrive more quickly than from Asia, a big concern to importers as they reduce inventory costs and lead times.
- Even though NAFTA has been controversial, this trade agreement and others with Europe, Japan and Latin America have given Mexico duty-free access to more markets than any other country.
Work still needs to be done to make Mexico a stronger economy and financial partner in North America. There is need for: much improvement in reform of labor practices, an increase in the integrity of public institutions, and education to give skills to the population in general.
Mexico is currently the world’s top retirement location
Continued improvement in the quality of life for its residents is tied to the economic health of the country itself. Without jobs and income for its citizens, there can be no quality of life for these people as well as for those who choose to buy and live in Mexico.
People buy real estate in Mexico every year. They will continue to do so.
This article is based upon Flex MLS reporting, legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his own due diligence and review. If you have any other questions, contact me through my website.Harriet Murray