Get to Know the Manufacturing Powerhouse that is El Bajío

The Bajío region of West North-Central Mexico — which includes parts of the states of Aguascalientes, Jalisco, Guanajuato, Querétaro, and San Luis Potosí — is known for its rich history in silver mining. Today, however, it’s making a name for itself as a growing manufacturing powerhouse.

This densely populated region saw 47% growth in manufacturing from 2013 through 2018, reports Mexico News Daily. In fact, the Bajío region was the country’s leading driver in manufacturing growth during that five-year period, and its industrial industry has surpassed the country’s economic growth. El Economista attributes this powerful increase to commercial alliances formed in late 2018 between Guanajuato, San Luis Potosí, Querétaro and Aguascalientes. But that’s simply the latest step of more than a decade of incentives and infrastructure development that have led the region to become a prime destination for foreign investors seeking to expand into Mexico.

A growing manufacturing corridor

The central lowlands region has grown as a manufacturing center in part due to a strengthened rail and highway system that has helped connect it to the United States as well as both Atlantic and Pacific ports. Geopolitical analyst Stratfor suggest that its location away from the border territories, where investors must balance access with security concerns, also is attractive. This area also hosts a large, educated population exceeding 19 million.

To continue the area’s growth, the governors of Guanajuato, San Luis Potosí, Querétaro and Aguascalientes agreed in November 2018 to create a new manufacturing region, the Central Bajío Corridor. This first of its kind region seeks to combine production and logistics capacities to attract domestic and foreign investment.

As a first step, the state governors are working with government resources and private organizations to develop infrastructure and link supply chains and logistics. Experts expect these initiatives will have added impacts on investment, social development education, security and employment in the broader region and further increase these states’ export output.

Óscar Vega Pérez, who leads the project as president of the Regional Development Association of Central Mexico, told El Economista that small and medium-sized businesses will be crucial to the success of this initiative. As a result, investors in the region can expect a welcoming business climate looking to support their operations with easy accessibility to local and global suppliers and markets.

A dive into the regional makeup

When considering expanding into the Bajío region, employers have many factors to weigh, from incentives to workforce availability and supply chain access. To start, take a brief look at what you can expect from each of the states that form El Bajío.

• Querétaro is a regional leader in automotive manufacturing but is also home to well-known brands including General Electric, Coca Cola and Samsung. According to Tetakawi’s Querétaro Labor Market Report, turnover in the Querétaro region tends to be lower than other areas in Mexico and manufacturing continues to grow here, from 20% to nearly 23% of employment in the state in 2018 alone. In Jan. 2019, workers in Querétaro earned an average daily salary of USD $22.13.

• Aguascalientes has enticed many major automotive and vehicle component manufacturers, including a recent investment from Continental to build its largest of 24 Mexican plants here in this state. The state boats a relatively young workforce, with nearly half of its 1.1 million residents under age 24 as of 2015. Add to that a position in the middle of the country, connected as easily to the Atlantic as Pacific coasts by highway and three national railways, it’s easy to understand the appeal. Data from IMSS indicates an average salary of USD $18.69 per day as of Jan. 2019.
• Jalisco, from its position along the Pacific Coast, boasts the third-richest economy in Mexico. Together with its capital, Guadalajara, it possesses one of the country’s best infrastructures for industrial development. This is led by a powerful IT and electronics sector, which made up more than 53% of the state’s exports as of 2016 and has earned it the name “the Silicon Valley of Mexico.” 

• Guanajuato, since 2010, has led the Bajío region in manufacturing output. For the last decade this central Mexico state has ranked fourth for the value of its economic output as a Mexico manufacturing powerhouse. It is home to new operations from electronics manufacturer Bosch, Toyota, and aerospace conglomerate IK Aerospace Group. Data from IMSS says this state has an average daily salary of US $16.92 as of Jan. 2019.
  
  
• San Luis Potosí is no stranger to logistics agreements. It consolidated its automotive supply chain with the development of the Automotive Cluster SLP. In early 2019 alone, BMW opened a plant here, employing a workforce of 2,000, while Spanish metal parts supplier Gestamp hired 300 workers for its new operations. Data from IMSS indicates an average income of USD $19.62 per day in San Luis Potosí as of Jan. 2019.

A travel destination

With its temperate climate, rich culture and intriguing history, it’s no wonder that El Bajío is becoming a leisure destination. Add to that a talented workforce and strong manufacturing and distribution network, and it’s clear why this region is a place where people want to both live and work.