When Does Nearshoring Start for Mexico?

blog | May 01, 2023

We are currently talking about the trend of relocating companies or nearshoring. Mexico has already experienced this trend some years ago.  

From the six-year period of Ávila Camacho (1940-1946), the foundations were created for industrialization in Mexico, known as the "Import Substitution Model", an initiative that took place from 1946 -1952 during the government of Miguel Alemán Valdés. Infrastructure works increased, especially on roads and bridges, private investment, tax exemptions and reductions were promoted, support for private investment in the countryside, and an increase in public credits. Promotion of firm and continuous industrialization during the fifties with small and medium-sized enterprises emerged. 

During the Second World War (1940-1955), the countries involved focused their production on armaments, which drove Mexico’s economy to the production of certain light manufactures to meet the needs of the growing domestic market, as well as to export surpluses to the US market. Under this new model, foreign investment would be complementary and should be adapted to the conditions and needs of the host countries. 

In 1966, the maquiladora program was created, which promoted the establishment of export production plants along the northern border, offering duty-free access for the import of inputs and machinery. These strategies transformed the country from an agrarian economy to an urban, semi-industrial society. 

Since then, the focus of attracting foreign investment to Mexico’s industry has continued to grow and the trend shows that it will continue to happen due to the relocation of quite a few companies around the world.