The world’s largest TV maker, Chinese electronics manufacturer Hisense, Co., has announced they will double investment and capacity at their Mexico production facility, underscoring the global draw to manufacture for export in Mexico.
China Moving to Mexico?
Once known as the offshore partner of choice, China has experienced dramatic increases in price, most notably in the price of labor. As the trend shifts, many companies are choosing to nearshore production to Mexico for export to the US and other consumer markets. And some of those companies moving production to Mexico are from China, of all places.
Shrinking margins have forced some companies out of the market, put others are more willing to cut profits and relocate operations in order to strategically enhance market share. For Chinese electronics manufacturer, Hisense Co., this involves investing in a Mexican manufacturing facility to target the US consumer market as well as developing Latin American markets.
Hisense bought their facility from Sharp Corp. for $24 million USD over a year ago. It is in Rosarita, Mexico, and currently ships 1.5 million units to North America. The facility currently sits on 49 acres. The Chinese electronics manufacturer employs 500 people, and houses a warehouse with a supply-chain platform, a free healthcare clinic, a childcare facility, and a recreational sports facility.
The Qingdao-based company has recently announced it is more than doubling its investment there with an infusion of another $30 million USD to enhance automation and increase production capacity to 4 million units. While Hisense is currently the 3rd largest television manufacturer in the world – recently surpassing Sony – its share of the North American market is relatively small. Partnering with Mexico is the cornerstone of their strategy for increasing market share in the US. They aim to become the 3rd largest television provider to the US in just three years.
“In addition to enhancing our logistics and fulfillment capabilities through its strategic location, this world-class facility will be producing a total of 47 television models that will be available to consumers across North and South America this year,” states Hisense North America CEO Jerry Liu
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