Chihuahua: a perfect location for nearshoring projects
In the last few years, the automotive, metalworking, aerospace and electronics industries have ranked high with the phenomenon of nearshoring, or offshoring, which involves moving business operations to a location close to the end consumer.
It is important to understand how this process has worked nationally and how the Chihuahua industrial park offers significant advantages to companies seeking to invest in Mexico.
From offshore to nearshore: reasons for this change
Companies have been pushed to reconsider their choice of locations due to many factors, such as the enactment of the new USMCA, the trade war between China and the United States, or the health crisis caused by COVID-19.
Before these events, the supply chain concept was global and not regional, thus elements like geographic proximity or time zone similarity were not considered competitive advantages for international trade.
This is one of the reasons why China and India were, for a long time, strategic locations under the offshore approach. However, under current conditions, this alternative is less likely to prosper.
Within this context, and during the Donald Trump administration, many U.S. and foreign companies began a reshoring movement. Their goal was to relocate their operations to the United States or find suitable locations, preferably in Mexico’s northern border states, the capital or the Bajio region.
How does Mexico’s transportation infrastructure support these operations?
As stated by IMEF experts, Mexico possesses adequate transportation infrastructure to attract new investments since it has the following features:
- Over 105,633 miles1 of paved roads and highways.
- 53 bridges and international crossings to the United States.
- A logistics network comprising 102 seaports and 78 airports.
- More than 16,155 miles of railroads.
The above are features stand out from other location options, leaving the northern border area as one of the best in the world for nearshoring.
Chihuahua industrial park: one of the best locations for nearshoring investments
In Mexico, location plays a key role in bringing investors in the nearshore scheme advantages such as skilled labor, lower logistical and operational costs, reduced tariffs and taxes, and a diverse and developed sector.
A closer examination of Chihuahua, reveals that in 2022 the figures show more than its economic reactivation; it reveals the growing interest in foreign investments in this state.
By August of 2022, the Chihuahua industrial zone estimated a total of 548,959 sqft2 of industrial buildings under construction and an available building of 168,993 sqft.
It is also worth noting that in the second quarter of 2022, the market registered a demand of 376,736 sqft. This situation is expected to persist for the next few months due to the number of projects planned for this industrial zone.
As for the investment figures, 60% concentrated on tailor-made projects and 40% on logistics centers, which mirrors the ever-increasing preference of companies to invest and work in Chihuahua.
At Advance Real Estate, we support Mexico’s economic growth by providing industrial spaces and Build-to-Suit projects in strategic locations in the country’s northern regions. Contact us and find the ideal space to run your operations.
Information source
- www.eleconomista.com.mx/revistaimef/La-infraestructura-de-cara-al-Nearshoring-20220802-0063.html
- centrourbano.com/inmobiliario/reactivacion-del-mercado-industrial-de-chihuahua
- www.elheraldodechihuahua.com.mx/analisis/nearshoring-una-gran-ventana-de-oportunidad-para-chihuahua-8424345.html
- www.imef.org.mx
