GM, Ford, Daimler Chrysler and other large multinational companies wanted their suppliers to relocate to Mexico to shorten supply chains and take advantage of the region’s quality infrastructure, low wages and competitive pricing.
Visteon supplies vehicle electronics systems, electrical and electronics parts to the U.S. automotive major Ford. Delphi produces power-train, controls & security, electrical and electronics components for U.S. based General Motors. Denso produces instrument clusters, valves and VCT to serve the automotive equipment needs of Japanese auto manufacturer, Toyota.
The supply chain for automotive parts has strengthened and has grown steadily. For example, Mexico based operations for Toyota, Honda, Nissan, Tyco International, Johnson Controls, Honeywell, Lear Corp, Whirlpool Corp, Schneider Electric and Navistar have teamed up with U.S. suppliers for automotive parts and components.
Conducting automotive manufacturing in Baja CA can lead to higher production outputs, quicker turnaround time along with affordable labor costs (40 – 80% below U.S. labor costs)
Located in the border region of Mexico, Baja CA’s proximity to the North American market has substantial advantages for U.S. and global automotive OEMs. Gain quicker access into the North American market, shorten supply chains and maximize rate of returns. The city of Tijuana, Mexico is located minutes from San Diego, CA is renowned for its vehicle assembling and auto parts manufacturing units. Tijuana offers full range of low-cost, next-to-market manufacturing and assembly options. Global automotive majors like Toyota and Hyundai have established their operations at Tijuana.
Major auto parts suppliers like Pioneer, Motorcar Parts of America, Bose, Autoliv Safety Technologies, HST Automotive and 40 other companies have established their manufacturing plants in Tijuana.
Strategic Advantages of Relocating or Expanding Manufacturing in Mexico:
- Cost effective manufacturing
- Near shore location
- Just-in-time production capabilities
- Qualified and trained workforce
- Quicker shipping time of spare parts in 1-4 days to the automotive majors in the U.S.
- QS-9000 Certified suppliers
- Major automotive supplier base in the Baja CA – Southern California region
Many automotive OEMs and suppliers from the U.S. have established operations in Baja CA. Some of the U.S. based auto parts suppliers settled in Baja CA manufacture metal parts, seat belts, sound speakers, carbon fiber body kits, trailer chasis and electronic sensors.