10 Major Industries In Mexico - Key Sectors For Manufacturing

10 Major Industries In Mexico

Industries play a vital role in the development and growth of any country, and Mexico has certainly benefited considerably from trade liberalisation and manufacturing growth. Mexico sourcingis best option for any business that makes and sells physical products. This article gives you an overview of the top 10 industries in Mexico so that you can get an insight into its manufacturing potential.

Factors That Have Contributed To Mexico’s Economic Growth

Over the last three decades, Mexico’s economy grew significantly due to transnational free trade agreements, foreign business investment from South Korea, Japan, Canadian, US, and European companies. The escalating trade and political tensions with China over the last few years also renewed interest in Mexico as a business location.
Like the rest of the world, Mexico’s economy was significantly affected during the coronavirus pandemic but is recovering as international borders reopen and countries return to normality again. Through SIXM you can get Manufacturing Consulting Services in Mexico for any industry.

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Major Industries In Mexico

Mexico’s industries are extremely well-established, with many companies having years of experience with exporting to Europe, the US, Australia, and Canada. This offers product sourcers and procurement teams plenty of sourcing options. Some key industries include automotive, aerospace manufacturing, medical and health devices, electronics, appliance manufacturing, furniture, food and beverages (tequila, mezcal, and beer!), oil and gas, apparel & textile manufacturing, packaging, and consumer products.

Some industry watchers also suggest that the country’s moves towards legalising cannabis could also create a major economic growth sector.

Read More: Manufacturing In Mexico vs China

Top 10 Manufacturing Industries In Mexico

Here we have provided you with the list of Mexico's top 10 manufacturing industries. Following is the Mexico industries list;

Automotive

Mexico is the sixth-largest automobile producer in the world with a major automotive industry. For over 30 years, it has been a major international location for assembling facilities and primary parts production. Some of the key automotive states in Mexico are:

  • Coahuila
  • San Luis Potosí
  • Puebla
  • Nuevo León
  • Jalisco
  • Guanajuato

Aerospace Manufacturing

In Mexico, aviation is a critical sector and continues to experience significant growth. New routes are being opened all the time and it also has a large cargo flight sector. There are over 300 aerospace manufacturing companies (OEMs, Tier 1, 2, and 3 suppliers). Queretaro, Sonora, Chihuahua, Nuevo Leon, and Baja California are the key aerospace areas in Mexico. There are also aerospace cluster areas to encourage industry innovation and investment.

Medical Device Manufacturing

Over 650 companies are involved in Mexico’s medical device industry, with Baja California being the major medical device manufacturing region. Some major brand names operating in Mexico are: Medtronic, Kimberly Clark, Boston Scientific, Johnson & Johnson, Cardinal Healthcare, and Stryker.

Electronics

Since the signing of the 1994 NAFTA agreement (now replaced with the United States Mexico Canada Agreement), Mexico has been a major location for the assembly and manufacturing of electronics. This includes electronic components for automobiles, aeroplanes, home appliances, medical devices, and consumer electronics.

A significant amount of manufacturing is carried out by the major contract manufacturers like Flex, Jabil, Foxconn, and Sanmina.

Appliance Manufacturing And Furniture Manufacturing

Mexico is the 5th largest exporter of household appliances and furniture in the world. Some of the major companies manufacturing in Mexico are Electrolux, Whirlpool, American Standard, and Fisher & Paykel. In 2020, the Swedish furniture giant IKEA announced that it will establish a manufacturing plant in Coahuila, Mexico.

Agriculture

Mexico’s agricultural sector is one of the main drivers of its economy, with about 78% of its total agricultural exports being sent to the United States. Some of its top exports are: corn, avocado, limes, lemons, coffee, sugarcane, barley, beans, blue agave, chilli, sugar, wheat, pineapples, cacao, mangos, tomatoes and poultry. While the US is the key export location, more distant places like Australia, Japan, and Singapore also receive Mexican produce.

Mexico’s agricultural products come mainly from three parts of the country; the tropics of the Gulf of Mexico, central Mexico’s Bajia region, and the Chiapas Highlands.

Food Processing and Beverages Industry

The food processing and beverage industry is another major economic force in Mexico. It has the world’s 11th largest food processing industry and is the 3rd in the Americas after the US and Brazil. Tequila and mezcal both come from Mexico, as do the globally renowned beer brands Corona, Tecate, Model, and Estrella. Some of the key processed foods exported from Mexico are juices and nectars, sauces, canned fruits, canned legumes, seafood products, cereals, and typically Mexican foods ( for example moles, hot sauces, guacamole, avocado cubes).

Food processing tends to occur in the southern and central part of Mexico where the base ingredients can easily be found.

Oil and Gas Industry

Mexico is bounded by the Pacific Ocean on its western coastline and the oil-rich Gulf of Mexico on its eastern side. Its geography makes it the world’s 10th largest producer of oil and it holds approximately 11.1 billion barrels of oil reserves, which is the 18th largest in the world. In December 2013, Mexico amended its constitution to allow local and foreign investments into the energy sector and this led to the energy giants like BPH, BP, Shell, Murphy Energy, ExxonMobil, and Chevron putting their operations in the country.

Apparel & Textile Manufacturing Industry

As Mexico’s fourth-largest manufacturing industry, apparel/cloth and textile manufacturing accounts for about 4.7% of Mexico’s manufacturing GDP (textiles 1.3%, apparel 2.5%). It is the 5th largest worldwide exporter after China, Vietnam, Indonesia, and Bangladesh. In addition to producing high grade consumer garments (e.g. leather jackets, boots, denim, suits), Mexico has strong expertise in technical fabrics due to its automotive and aerospace manufacturing experience.

Consumer Product Manufacturing

Mexico’s consumer products manufacturing industry has been growing as companies shift their production to Mexico because of its low costs and delivery times. Products such as cosmetics, toys, games, household goods, and personal care products are made in Mexico; in fact, Mexico is one of the biggest toy producers aside from China and Brazil. Mexico also has a major plastic manufacturing industry.

Which Manufacturing Industry Is Most Profitable?

The profitability of manufacturing industries varies based on various factors such as market demand, competition, and cost structure. However, some manufacturing industries tend to be more consistently profitable than others. Among them, pharmaceuticals are one of the most profitable industries in Mexico. Additionally, technology hardware, aerospace & defense, and automotive manufacturing are also considered to be highly profitable.

It is important to note that profitability varies within sub-sectors of these industries. Some other factors such as market conditions and individual company performance also play a significant role in determining profitability.

Mexico’s manufacturing industries continue to grow and are becoming increasingly sophisticated with automation technologies and state of the art production machinery. This is happening as Mexico develops itself into a global start-up and technology-first hub; its IT, fintech, logistics, e-commerce, sustainable technology, agribusiness, and mobility sectors are the key areas that are seeing the greatest amount of innovative ventures.

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