Moving Manufacturing from China to Mexico

Prices and instability are rising in China. Relocating operations to Mexico has never made more sense.

Benefits of Moving from China to Mexico

Over the past decade, China’s manufacturing wages have risen to an average of about $3.50 per hour, while Mexico’s factory labor has remained steady at about $2.50 per hour. Meanwhile, costs of shipping products from Asia to the US have risen, often taking several weeks to ship. But products assembled in Mexico can reach US customers in just days. Furthermore, skyrocketing tariffs of 10-25% are making it even more expensive to manufacture in China. But companies who move manufacturing from Asia to Mexico have tariff-free access to the US and over 40 other countries.

  • Affordable Skilled Workforce

    Manufacturing workers in Mexico’s maquiladora program (IMMEX) are highly skilled and on average cost less than Asian labor. The country’s robust academia-industry partnerships ensure a large pool of specialized and skilled labor usually at a more affordable cost.

  • Transportation Cost Savings

    With greater proximity to the US and lower fuel prices, Mexico offers manufacturers lower transportation costs in addition to shorter lead times. It costs around $4300 to ship a container from China, but just $1800 from Mexico.

  • Highly Developed Supply Chain

    Asia offers low-cost manufacturing hubs, but their supply chains are in infancy. Mexico’s maquiladora program has thrived for decades, and the supply chains among the country’s industry hubs are well-networked and run deep.

  • Duty-Free Import/Export

    While high tariffs and political unrest are just part of the difficulties of doing business in China, Mexico offers tax-free access to the US and 40+ other countries. US companies nearshoring to Mexico can import and export materials and products duty-free.

How it Works

Relocation from China to Mexico is easy with a shelter service provider. Tecma’s shelter services make it simple, low-risk, and quick to move manufacturing from Asia to Mexico.

The process typically involves only a few steps outlined below and takes about 30-90 days to be fully operational and manufacturing in Mexico.

Just How Does a U.S. Company Move Manufacturing Back from China?

  • 01

    Cost Analysis Consultation:

    Speak to us and find out what savings your company can make by relocating your manufacturing to Mexico

  • 02

    Analysis Based Decision:

    Review your Tecma-prepared cost analysis and commit to relocating some or all operations to Mexico

  • 03

    Plan Your Strategy:

    Work with Tecma to prepare your relocation strategy and timetable.

  • 04

    Negotiate Transfer Agreement:

    You and Tecma meet with your Asian manufacturer and negotiate an agreement where equipment and technology are transferred to Mexico.

  • 05

    Initiate Transfer:

    Tecma begins and coordinates the transfer of equipment and technology.

  • 06

    Open Mexican Operations:

    Tecma assists with site selection, provides qualified employees, and takes responsibility for all legal issues.

  • 07

    Production Success:

    You can grow your business by focusing on your core manufacturing functions.

Toby Spoon Executive Vice President of Tecma

Comparative cost analysis of doing business in Mexico vs. staying in China

More about China

Toby Spoon Executive Vice President of Tecma

Reverse Engineering
Your Product

What if Your Chinese
Manufacturer Won’t Cooperate?

China’s economic situation can be unpredictable. They have been known at times to hold machinery and technology hostage to prevent US companies from leaving. You may lose access to the machines, raw materials, or technical drawings for manufacturing your product. This can be intimidating for US companies interested in near-shoring to a Mexican industrial center like Tijuana or Juarez. But it shouldn’t be a reason to forgo the advantages of Mexico’s cost savings and stable manufacturing environment.

Tecma’s “Reverse Engineering”
Solution

Tecma has developed a specialized service to reverse engineer your product for manufacturing in Mexico. Shelter manufacturing in Mexico with Tecma can include reclaiming your intellectual property through essentially cloning your product. We can recreate the technology and methodology needed to manufacture your product to its original specifications. And it’s all perfectly legal, because it’s your product.

You don’t have to be dependent on China and their shifting regulatory or tariff situation. You can start producing the exact same product in Mexico even without their cooperation. Tecma’s engineers will develop a manufacturing plan, including machinery and raw materials requirements, and set you up with your own manufacturing operation in Mexico.

What’s the Cost?

When calculating costs for relocating operations to Mexico, first consider the costs of remaining in China as US trade relations falter and the prospect of your company having little to no products to take to market.

Implementing your Plan B and taking a step towards production independence requires a minimal deposit to develop a preliminary study and proposal, which includes:

  1. Cost estimates for re-creating your product

  2. Breakdown of all required production equipment and raw materials with expenses

  3. Comparative cost analysis of doing business in Mexico vs. staying in China

A Mexico manufacturing location for every industry