The region known as El Bajío can be found in Central Mexico, encompassing an area that spans several states including Guanajuato, Aguascalientes, San Luis Potosi, Michoacan, Zacatecas, and Querétaro.
Once an important agricultural region, El Bajío has become a mega-cluster of automotive manufacturing in Mexico, and one of the most important in all of Latin America. The region’s share of Gross Domestic Product (GDP) is at 26 percent within the states of Jalisco, Querétaro, San Luis Potosi, and Guanajuato.
As one of the most vital regions to Mexico’s economic success, the area has drawn in dozens of production facilities of Tier 1, 2, and 3 auto part suppliers. Your contract manufacturing partners and international business service providers at El Grande Group are eager to provide you some insight as to why expanding your manufacturing company into El Bajío, Mexico is one of the best business moves you can make.
El Bajío Experiences a Growth Spurt
Many factors can be attributed to El Bajío’s regional success. When Mexico opened its borders to international trade by signing the General Agreement on Tariffs and Trade (GATT), the manufacturing industry was in its infancy.
El Bajío soon became known for its manufacturing value and many companies in the automotive industry set up their operations within the region. This helped to launch Mexico into one of the top spots for both automotive manufacturing and exporting. The bustling industry then cleared the path for more supporting industries to move in and set up nearby distribution chains within El Bajío, like the ones that feed Nissan in Aguascalientes and GM in Guanajuato and San Luis Potosi.
For Mexico, this solidified the Bajío region as one of the country’s top economic boosters.
The Benefits El Bajío Provides
El Bajío has many logistical advantages, spacing available, and employee training programs. Manufacturers in El Bajío enjoy ease of access to the United States and Latin America via major highways, seaports, and both major railroads that cross over the region. Let’s not forget about the eight international airports that support the region’s auto manufacturing sector and other industries as well.
In short, Mexico’s geographical location is a boon, providing ease of access and connections throughout the country and into neighboring countries.
Manufacturing in El Bajío Tops That of the National Economy
While the rapid progress that El Bajío had experienced between 2003 and 2016 registered an average annual growth of 1.7 percent, 2017 was met with a substantial 4.6 percent growth rate.
When we analyze the results from a state perspective, San Luis Potosi had the best first nine months of 2017, where production of manufactured products grew by 8.5 percent. Querétaro was a close second with 5.2 percent growth during the same period. Even though things seem a little unclear with how the renegotiation of the North American Free Trade Agreement, it is expected that the state of Jalisco will experience a 3 percent economic growth in 2018.
When we look at the picture as a whole, it is estimated that production within the Bajío region will grow at an annual rate of 4.4 percent this year, and Guanajuato is expected to grow between 2.1 and 2.5 percent as well, maintaining its reputation as the biggest producer in the region.
A Large Population of Qualified Employees to Pull From
Another reason why the area has experienced an industrial boom is because of its location near Mexico City. Over 10.5 million people call Mexico City home, and many of them are turning into skilled employees through the high-quality colleges and institutions in the region.
When the automotive industry came, it brought along its employee training programs as well, which have been used to mold educated workers into skilled workers.
While no industry is safe from turnover, the Bajío’s rates are lower, specifically in Querétaro. The people there enjoy a salary that is 1.1 percent larger than the national average, bringing home around $351.5 to $317.9 MX pesos a day. For this reason, many employees stay with their employers for the long term, both growing their careers and companies in tandem.
Because the Bajío encompasses many states, there is still plenty of room to fit more companies looking set up a manufacturing location. All we need is you.
El Bajío is calling. Opportunity beckons. Let El Grande Group help you get your manufacturing company started in Mexico.
The Bajío is a rich and diverse place that can both house your manufacturing firm and deliver skilled talent that will earn you the biggest return on your investment while providing quality and effective productivity.
What are you waiting for? Time is money! Contact our international manufacturing experts today.