There was a time when hands down, it was cheaper to manufacturer in China than almost anywhere else in the world. But times have changed and what was once a manufacturer’s paradise is now a land of cost overruns. One of the hottest countries right now for offshore or nearshore manufacturing is Mexico, and when you look at Mexico vs China, the reasons are clear.
According to Forbes, manufacturing costs in Mexico are now about 20 percent lower than in China. Industrial space leases are also a major cost factor with China’s rate being triple that of Mexico. And don’t even mention shipping costs which have risen from just under $3,000 in 2000 to $7,000 in 2014 for a standard shipping container.
And while cost is a key factor in choosing a manufacturing location, Mexico offers other benefits over China as well. The culture is western and much more familiar to American and European companies. Travel time for both product development and product shipping is greatly reduced to Mexico vs China. The government and private sectors are very pro-business and have created an environment that welcomes foreign investment.
So if you are considering offshore or nearshore manufacturing consider lowering costs in Mexico.