Cost savings and ease of doing business is found close to home by companies that are nearshoring manufacturing to Tijuana.
Tijuana is well-placed for many manufacturers
Global manufacturing companies have a multitude of varying reasons for choosing specific geographic locations for their Mexican manufacturing operations. Among the variables that are taken into consideration when making a location decision are:
- transportation infrastructure and requirements;
- locations of suppliers, markets and customers;
- availability of labor with requisite skills;
- presence of energy infrastructure that may include access to natural gas.
- congruence of time zones; nearshoring to Tijuana enables US-based companies to coordinate with their Mexican plant during matching, or overlapping business hours.
The metropolitan Tijuana and Baja California region, and Southern California area, with the major cities San Diego and Los Angeles, are extremely connected. Tijuana sits less than 20 miles south of downtown San Diego, which makes it extremely attractive as a base of logistic operations.
Service both the US and Pacific Rim nations from a Baja California plant
Although the situation has rapidly changed to a large degree in favor of Mexico due to significant economic challenges currently facing Asia’s largest export economy, under certain circumstances, operational and total market costs still may be, in limited and specific cases, lower in China. In spite of the fact that some foreign companies continue to manufacture there, nearshore manufacturing to Tijuana, and Mexico in general, is now the more rational in terms of both cost and ease of doing business.
Beyond the aforementioned, nearshoring manufacturing to Tijuana represent a shared connection to similar geographical, political, historical and cultural background affinities with US, as well as means access to a first rate communications and educational infrastructure. Tijuana and Baja California is not only an optimal locations from which to service major West Coast markets, but also from which to efficiently service existing and newly minted customers in the Pacific Rim countries that are a part of the newly formed Trans Pacific Partnership (TPP) free trade bloc. The combined gross national products of the twelve signatories to the TPP represent forty percent of global economic output.