- Manufacturing in Mexico
- About Tetakawi
July 15, 2019
Nestled in the high desert of Mexico’s third largest state, Saltillo is home to a booming automotive cluster. With a strong educational base, connected infrastructure, and a well-established automotive culture, Saltillo is a premier choice for manufacturers looking to establish auto manufacturing operations in Mexico.
Mexico’s automotive manufacturing industry can trace its way back to the early 1900s when some of the auto manufacturing greats – Daimler, Renault, Buick, and Ford – began assembly operations in the country. As the world’s 5th largest auto parts producer and the primary exporter of vehicles to the U.S., Mexico became a clear world leader in the automotive manufacturing industry very early on.
Today, auto and auto parts manufacturing is Mexico’s largest industry, and the country is home to 21 plants that produce more than 3 million parts yearly. Over 40 established automaker brands are produced in the country.
With 27% of the nation’s automotive fabrication, Saltillo, Coahuila ranks first in Mexican automotive manufacturing. 30% of passenger vehicles and 62% of trucks produced in Mexico are assembled in Saltillo, and the region is a globally recognized platform for the industry.
Saltillo is located in Mexico’s third largest state, Coahuila, which is strategically situated in the country’ northeast corridor. Covering an area of over 16,000 miles, Coahuila borders the U.S. state of Texas for 318 miles, which is extremely valuable to manufacturers looking to shorten U.S. supply chains.
Saltillo’s unique geography offers strategic benefits compared to alternate locations in the region (Monterrey in particular). Perched high in the Zapaliname mountains, Saltillo’s elevation reaches 5,200 feet. Despite its situation near the Chihuahuan desert, the city’s heights making it a cooler and windier locale than other areas of Mexico, with sunny winters and scarce rainfall. This moderate climate means low air conditioning and heating costs year-round – an often overlooked feature unique to Saltillo that helps reduce the operational bottom line.
Part of Saltillo’s appeal as an auto manufacturing hub is due to its infrastructure, which is one of the benefits of its prime location. A short 3.5- hour drive from McAllen, Texas, Saltillo is located just 180 miles from the U.S. border. Access to Mexico’s major highway networks I-40 and I-57, make the quick trip possible and also enable international connections along the entire NAFTA corridor.
Beyond international road networks, Saltillo is a mere 50 miles away from Monterrey, which gives manufacturers quick access to Houston, Tampico’s seaports, and the Monterrey International Airport. Saltillo’s regional airport – Plan de Guadalupe Saltillo – hosts an international air terminal with customs processing, shipping, cargo, and sanitary inspection services.
Given all of the city’s infrastructure conveniences, Saltillo is a great option for automotive manufacturers who want to maintain or increase production without significantly driving cost.
Beyond the cost advantages of infrastructure and location, Saltillo’s growing research and expansion capabilities offer cost advantages to automotive assembly plants and OEMs for product development. Major automakers have realized this and continue to flock to Saltillo, creating a robust industry cluster in the area.
General Motors has three divisions in Saltillo, which are occupied in motor and transmission assembly, body part stamping, and car assembly. Daimler Chrysler has two plants in Saltillo; the first is an assembly plant for Dodge Ram automobiles, the second is primarily focused on engine assembly. Additionally, the KIA plant in Monterrey is located a very short distance from Saltillo.
In addition to these household names, there are several Tier 1 supply companies that operate in Saltillo. These include Arnecom, Benteler, Brown Corporation, Burgess-Norton (which operates four plants), Cooper-Standard, Delphi Technologies, Kay Automotive Graphics, and Lear Corporation (which also operates a Lear Corporation division for Ford in the area), among others.
In the 1950s, Chrysler and General Motors established assembly plants in the city, building the roots for robust automotive industry growth. Backed by this history, Saltillo’s economic base is comprised mostly of auto industry firms – this implements a strong culture of automotive skill and understanding throughout the region.
With a robust educational infrastructure, workers and professionals geared toward automotive manufacturing have access to over 17 universities, 11 research centers, and 17 technical schools. Their sophistication is reflected in stats on the labor force – Saltillo boasts one of Mexico’s highest productivity rates with below average employee turnover.
At the same time, workers in Saltillo typically cost 25% less than workers in nearby Monterrey, adding yet another cost benefit to automakers in the region. The city is known for establishing and maintaining cooperative relationships with labor unions, and connections with the local business community are solid.
Given Saltillo’s attractive environment for auto manufacturing, it is a popular choice for establishing operations. Tetakawi offers several resources for determining if Saltillo is an ideal location for your business:
Contact us to talk to an expert in automotive manufacturing operations in Saltillo and get your questions answered.
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