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Manufacturing in Mexico: Things to consider before making the move

Thinking about establishing a manufacturing plant in Mexico? Plante Moran Automotive Perspectives offers key actions suppliers should take when looking to expand into a new geographic market:

  • Get the home office involved from the beginning. An overseas plant requires a major investment of money and management time. The CEO should be personally involved.
  • Aim for a two-year break-even point, if possible, with a planning horizon of three to five years. You should understand that this is a long-term investment.
  • Make sure that you have a primary customer (or more) who can generate enough orders to support the plant. Avoid speculative projects based on a philosophy of "build-it-and-they-will-come." After the plant opens, work to diversify your customer portfolio as quickly as possible.
  • Put a high priority on management retention. In emerging markets, good plant managers are in high demand. Good salaries alone aren't sufficient; local managers need a long-term career path where they can see a future with you.
  • Seek outside expertise when you don't have strong knowledge in an area.

Return to the feature article: Mexico's manufacturing boom lures U.S. molders.

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