While Nogales, Sonora, has traditionally been a hub for manufacturing due to its proximity to the US border, some companies are exploring alternatives to offshore manufacturing in other regions of the Arizona-Sonora megaregion. By venturing further south, companies can find cost-effective manufacturing options that offer competitive advantages in terms of labor costs, real estate availability, and skilled labor pools.
Locations like Hermosillo, Guaymas, and Empalme present enticing opportunities for offshore manufacturing, with a focus on industries such as automotive, aerospace, electronics, and consumer products. These areas benefit from strategic infrastructure investments, access to educational and training facilities, and synergies with nearby manufacturing clusters, making them attractive alternatives for companies seeking to optimize their production operations in Mexico.
Working with experienced partners like Tetakawi can help companies navigate the complexities of offshore manufacturing and capitalize on the benefits of expanding their manufacturing footprint in the Arizona-Sonora megaregion.
Top Nogales manufacturing companies
Nogales’ manufacturing industry benefits in part from the robust aerospace manufacturing sector in Arizona. Arizona is a top-five leader in U.S. aerospace and defense manufacturing, and companies including Honeywell Aerospace have global headquarters there. This has created synergistic opportunities for manufacturers to source components from companies operating in Mexico. Numerous aerospace manufacturing companies can be found on either side of the U.S.-Mexico border, including EATON Nogales and B.E. Aerospace, which provide aircraft engines and parts.
This symbiosis has jumpstarted the growth of aerospace manufacturing throughout Sonora, making the state home to one of the fastest-growing aerospace industry clusters in the country. Today, more than 69 aerospace manufacturers can be found in areas across the state, including many located in Guaymas, which is home to over 13 aerospace companies.
Electronics manufacturing is another key area of focus for Nogales manufacturing companies, many of whom support aerospace, automotive and consumer products sectors. Similarly, the city has become home to injection molding manufacturers that can support the need for lightweight components across a range of manufacturing sectors.
Some manufacturers opt to locate their manufacturing operations in Sonora while locating warehouses or distribution hubs in Arizona. In some cases, this can help companies making low-value shipments benefit from de minimis duty-free exceptions.
Alternative locations in the Arizona-Sonora megaregion
Nogales’ manufacturing may have sparked the close relationship between Sonora, Mexico, and Arizona, but the impact of this engagement has been felt throughout the Mexican state. The government-led Arizona-Sonora mega-region was launched to promote business opportunities between these two states and has consequently developed a cross-border manufacturing powerhouse. These opportunities have helped develop a number of cost-effective manufacturing alternatives further south along Highway 15.
Today, more manufacturers than ever are looking to benefit from operations in Sonora’s southern manufacturing triangle:
· Hermosillo: Less than 200 miles south of Nogales sits the capital of Sonora, a manufacturing center in its own right. Ford Motor Co. established its Stamping and Assembly plant here in 1986, jumpstarting a robust automotive manufacturing industry. More recently, this cost-effective manufacturing expertise has led to growth in the city’s aerospace, medical device, and electronics manufacturing sectors.
· Guaymas: A two-hour drive south of Hermosillo, this large coastal municipality is home to the second-largest port on the Pacific coast. It’s this ideal location for global export that has grown a significant manufacturing industry in Guaymas. Today the city is one of Mexico’s premier sites for high-tech manufacturing, with a particular focus in the aerospace sector.
· Empalme: Nestled by the nearby, larger municipality of Guaymas lies Empalme, a quiet city with a population of just over 51,000 people. Manufacturers have been attracted to the city as a more cost-effective location for manufacturing and a quieter lifestyle for foreign nationals (albeit, with easy accessibility to local coastal tourist destinations). As a result, the city has seen infrastructure investments to support manufacturing, such as the Bella Vista Manufacturing Community.
Much like Nogales to the north, this manufacturing network has the benefit of a labor force with access to a host of excellent educational opportunities and technical training facilities. The key difference is that costs to the south of the economic free zone along the northern border are more competitive for many manufacturers. For example, a machinist in Hermosillo might see an average rate of $75 MXN/hour compared to $98 MXN/hour in Nogales.
There is greater real estate availability in southern Sonora as well, with Empalme’s Bella Vista and Hermosillo’s Rio Sonora Manufacturing Communities offering buildable space to lease in combination with a range of shelter services.
Find the right balance of benefits for your operation
U.S.-based manufacturers looking for a competitive edge in serving the aerospace, electronics, and related manufacturing sectors have long looked to Sonora as a cost-effective alternative manufacturing location. Now, manufacturers are recognizing that they can strike a stronger balance of benefit by exploring manufacturing locations further south of the border.
Working with a partner that understands cost variations can help. Tetakawi’s decades of experience assisting companies in launching manufacturing in Mexico has provided us with unique insight into costs and other trends that could impact your launch. We can provide clients with cost estimation, real estate, and a complete range of shelter services to get your operation up and running faster.
If you’re ready to explore competitive options for manufacturing in Sonora, Mexico, contact Tetakawi today.
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