Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Comparing Manufacturing in Tijuana vs. Mazatlán
Reading Time: 3 minutesIntroduction
Mexico has long been a manufacturing hub because of its large and skilled workforce, favorable laws and trade agreements, and generally low costs of production, but all of these wouldn’t be so significant if it wasn’t for its phenomenal geostrategic location.
The country is nestled between the Pacific and Atlantic Ocean in Central America which gives it easy and cheap access to both the North American as well as South American market.
Taking all of the above into account, it’s no wonder that there is an increasing number of companies and businesses relocating or expanding to Mexico and one of its different manufacturing zones.
Two of the most extreme examples of these manufacturing zones are probably Tijuana and Mazatlan. They are both excellent options and offer plenty of opportunities for new investment into manufacturing, but they do have many differences, geographically and business-wise.
In this article we will try to shed some light on these differences, from wages and employee turnover, all the way to the availability of industrial real estate in these manufacturing hubs, so continue reading to find out more about manufacturing in Tijuana vs. Mazatlan!
Tijuana
Tijuana has been a major industrial and manufacturing hub since the 1960s and the beginning of their maquiladora program. The city’s location on the border with the United States makes it a great choice for everyone wanting an easy, quick, and cheap access to the North American market.
Tijuana attracts investors and workers alike, with both skilled and unskilled labor from various regions of the country gravitating towards the city, because of its higher wages compared to the rest of the country. Although there’s an abundance of workers, there are also many companies with over 600 maquiladoras, so the competition to hire and keep the best workers is high.
Worker turnover in Tijuana is high, and all of these factors drive the wages up and while the workers enjoy higher wages, the relative cost of living in the city is also higher than in the rest of the country.
Industrial real estate is an area that leaves a lot to be desired. Although Tijuana has numerous industrial parks and individual factories, it simply can’t build enough to satisfy the consistently increasing demands, which raises the lease rates, and even makes it difficult to find vacant plots to buy and build on.
Mazatlan
Mazatlan has access to the markets of both North and South America thanks to its location on the coast of the Pacific Ocean. This city has only recently started to become a big name in the manufacturing world and was previously known as a fishing and tourism center.
The city has a much smaller population than Tijuana but also has less competition for skilled labor as there are fewer companies and businesses than in the Tijuana economic free zone.
Wages for skilled labor in Mazatlan are significantly lower than in Tijuana, and comparable to the national average, which combined with lower costs of living, perhaps a little surprisingly results in a lower worker turnover. Simply put, despite the lower wages, workers in Mazatlan are on average happier and stay in their positions much longer than their peers in Tijuana.
Another significant advantage of Mazatlan is the fact that there is enough industrial real estate to satisfy the demand, and the city is working hard on building new industrial parks with Tetakawi’s Mazatlán Manufacturing Community which is a 98-acre development, being just one of them, although probably the most notable one. These developments ensure that Mazatlan will continue to be able to maintain lower lease rates than Tijuana, thus attracting a steady flow of new investment.
Conclusion
Mexico is a country that offers opportunities for business-savvy investors to penetrate both North and South American markets quickly and with ease at a low cost. The country has various developed manufacturing zones that offer distinct advantages but come with many differences.
Two notable manufacturing hubs within the country are Tijuana and Mazatlan. These two zones are both excellent places for businesses to start their operations in Mexico, but it’s important to do enough research in order to understand which place is more fitting for which type of investment and business.
Tijuana boasts a longer tradition, a well-developed transport grid, and proximity to the Western world’s biggest consumer market, the United States, but because of its popularity, it also requires higher worker wages and has a more expensive and scarce industrial real estate landscape.
Mazatlan, on the other hand, is an up-and-coming manufacturing zone that’s been attracting a steady flow of investment because of its easy access to both the South American, and North American markets, and lower workers’ wages and turnover, as well as plenty of available industrial real estate, and relatively low prices.
Both of these hubs are an excellent choice, and each investor must choose the more fitting one based on their priorities and needs, be that access to certain markets, or budgetary constraints and requirements.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
Subscribe
Login
0 Comments
