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A study by the US consulting firm Bain & Company projects that Mexico could become the leading nearshoring market in the coming years.
The pandemic brought different negative consequences for the world economy and for Mexico. However, one of the effects that could benefit the country is the expansion of nearshoring in North America. This would be a great opportunity for Tijuana, Monterrey and Querétaro, who have an outstanding manufacturing sector.
What is nearshoring? This is the strategy by which a company transfers part of its production to third parties in other countries located in nearby destinations and with a similar time zone.
According to an investigation by the US consulting firm Bain & Company, Mexico can consolidate itself as a leading market for nearshoring. This is because its opposite, offshoring, has not been as profitable as expected.
The consulting firm projects that this strategy will accelerate growth in the country by at least two percentage points in exports from the manufacturing sector. This in the next few years would be equivalent to 8 billion dollars more per year, compared to what the industry currently produces. This sector is dominated by transport, mechanical and electrical devices and machinery industries.
Companies from all over the world could do nearshoring in Mexico.
Currently, China monopolizes the nearshoring market, but due to the pandemic, many companies have realized that they need to be closer to their collaborators, share a similar language and time zone, have less expensive transportation costs and delivery times and faster.
“Monterrey, Tijuana and Querétaro are some of the cities that, due to their already consolidated industrial environment, are attractive places for international companies that could relocate some of their production processes to Mexico. In addition to the United States and China, companies from Germany, Canada, Denmark and France have also begun to relocate operations to Mexico.Research by the consulting firm Bain & Company.
According to Forbes, Mexico has acquired a competitive cost advantage over China in the last six years. If there is a change of strategy in the industry, imports from companies in the United States and Europe in the automotive sector, household appliances, machinery, furniture, plastics, could change their nearshoring to Mexico.
With information from Forbes, T21 and Thomson Reuters Mexico
Translated by Paula Villanueva