SendaMarket entry and business development between Europe and North America
Why Mexico

Mexico: a serious investment opportunity.

For global corporations, Mexico is a must: 33 of the 40 DAX companies have their own subsidiary, branch, or representative office here.1 You’re not starting from scratch. Customers, supply chains, and skilled talent are already here.

German investment and technology, proudly operating in Mexico.

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A market in its own right

Mexico is more than a workbench.

With around 134 million people, Mexico is a large domestic market in itself,2 with an industry that needs machinery, components, automation, and service. For many mid-sized companies, the road to Mexico therefore starts with a customer who already manufactures there.

What this means for you: The first step isn’t finding a location. It’s mapping your target customers in Mexico.

A platform for manufacturing and supply chains

The industry is already there.

Over decades, an industrial ecosystem has grown in the north and in the Bajío, especially in automotive, aerospace, and electronics. More than 2,000 companies with German participation are registered in Mexico, and around a third of them manufacture in the country. 33 of the 40 DAX companies have their own subsidiary, branch, or representative office there.1

The large DAX groups come to Mexico with their own expansion teams. Small and mid-sized companies, over 99% of German firms, rarely have one.3 Senda has you covered.

What this means for you: You will meet customers, suppliers, and skilled staff who know European standards. What matters is whether the suppliers in your niche are already there.

Mexico compared: our assessment

CriterionMexicoChinaPoland, CzechiaVietnam, IndiaMorocco
Access to the US marketUSMCA-compliant goods duty-free7Extra US tariffs, rates keep changing8EU deal: mostly 15% US tariff8Ongoing US investigations, rates open8Free trade agreements with the EU and the US10
Proximity to the market1 to 3 days by truck to the US3 to 5 weeks by sea to the USClose to EU customers by truck3 to 5 weeks by seaBy truck ferry via Tangier to Europe10
Industrial ecosystemVery mature in automotive and electronicsThe deepest and broadest supplier baseStrong in automotive, closely tied to German industryGrowing fast, inputs often still importedAround 230 foreign firms in vehicle manufacturing10
Labor costsCompetitive for technicians and engineersNo longer a low-wage countryHigher, in zloty or korunaLowestModerate10
Energy and infrastructureCritical on grid connection and waterWell developedStable EU gridsVaries by regionVaries by location
Geopolitics and legal frameworkClosely tied to the US, USMCA reviewed every year9Highest risk from trade conflict and for IP protectionEU lawTarget of ongoing US investigationsSmaller domestic market, export-focused

Mexico wins if North America is your market. USMCA goods duty-free, trucks instead of container ships, and an industry that already speaks your standards.

Poland or Czechia fit better if your customers are mainly in the EU.

Vietnam or India fit better if labor costs decide and the US is not your main market.

Morocco fits better if you supply Europe and want an alternative to Eastern Europe.

China stays strong on its supplier base. The question is how much risk you want to concentrate there.

Assessment by Senda's experts, as of October 2026. Tariff details per the sources cited; US tariffs keep changing.

Sources: Institute for SME Research · German Federal Foreign Office · German-Mexican Chamber of Industry and Commerce · Senda · Senda · Holland & Knight LLP · Baker Botts LLP · White & Case LLP · Germany Trade & Invest · All sources

North America

A market and, depending on the business model, the hub for North America.

In 2025, Mexico was the largest trading partner of the US in goods and services: US$976.1 billion in total, including US$872.8 billion in goods trade. Much of it is shared production: intermediate goods cross the border in both directions.

And the trend points up: from January to August 2026, Mexico shipped US$419.3 billion in goods to the US, 18% more than a year earlier. With 17.4% of US imports, Mexico is the US's largest supplier, ahead of Canada and Taiwan.11

The US is the top destination for German investment abroad: 27.3% of the stock in 2024, around €460 billion, 102% more than in 2010.13 But new investment there fell 65% in the first half of 2026, to about €4.3 billion.14 The US market is still the goal. The question is where best to supply it from.

For some companies, Mexico is therefore more than a market: a location from which they also supply customers in the US and Canada. That does not happen automatically. It depends on the product, rules of origin, and tariffs.

The USMCA review, briefly explained

The agreement between the US, Mexico, and Canada (USMCA) runs until 2036. At the review on 1 July 2026, the US did not agree to an extension. Since then it is reviewed every year; the US government is already collecting comments for 2027. Compared with 2025, the list of questions no longer mentions “balanced trade” with Mexico and Canada or the joint Competitiveness Committee.16

What may shift: rules of origin and the North American share of your product. And with them, the question of where you manufacture, source, and invest.

What this means for you: The review is not a reason to wait, but a reason to model scenarios before the location decision.

Sources: El Financiero · Congressional Research Service · German Economic Institute · Reuters · White & Case LLP · Office of the United States Trade Representative · Office of the United States Trade Representative · All sources

Europe and Mexico

Fewer tariffs, more market access.

The EU and Mexico have modernised their trade agreement. It removes most remaining tariffs and opens more opportunities in services, investment, and public procurement, for the first time also at state level. It adds rules on digital trade and critical raw materials.

  • Signed22 May 2026
  • EU approval completed14 July 2026
  • Ratification by Mexiconot yet completed as of our check on 6 October 2026
  • In forcetwo months after mutual notification, date still open

For German investors, two agreements already apply today: the 2008 double taxation agreement, updated by a protocol in 2021,19 and the bilateral investment treaty, in force since 2001.20

What this means for you: Mexico becomes more predictable for European companies. If you assess now, you are ready when the agreement applies.

Sources: Council of the European Union · European Commission · German Bundestag · World Trade Institute · All sources

Investment

The capital is already on its way.

In 2025, US$40.9 billion of foreign direct investment flowed into Mexico, a record. 67.7% of it was reinvested earnings of companies already in the country.

What this means for you: Companies that are in Mexico keep investing. That is a stronger signal than any announcement.

Sources: Secretaría de Economía · All sources

Industry

Made in Mexico: already inside your car, your computer, and your plane.

Four industries in which Mexico has long been a fixed part of global supply chains.

Automotive
Around 3.4 million vehicles

Exported in 2025, 78.4% of them to the US.22 Mexico is the world’s fifth-largest manufacturer and exporter of light vehicles and the fourth-largest exporter of auto parts.23

Your automotive customers already produce here, and they need local suppliers.

Computers and servers
US$85.4 billion

Computer equipment exports in 2025, up 144.8% year on year, driven by AI servers.24 That puts them ahead of finished-vehicle exports.25

Around 95% of the components are imported. The opportunity lies in local value creation, not just assembly.

Medical technology
US$20.5 billion

Exports in 2025 (preliminary), more than 90% of them to the US. Mexico is the US’s most important medtech supplier, with around 175,000 employees.26

If you supply medtech to the US, you will find a well-established environment here, especially in Baja California.

Aerospace
US$10.7 billion

Exports in 2024, around 80% of them to the US. 368 companies (mid-2023), and, according to the industry, the world’s fourth-largest exporter.27

Strict certification is part of daily life here. An advantage for suppliers who already master it.

What this means for you: You are not starting from a greenfield. Customers, supply chains, and skilled staff are already in place in these industries.

We believe in Mexico.

Sources: INEGI · U.S. International Trade Administration · Expansión · Mexico Business News · Germany Trade & Invest · Expansión · All sources

Locations

Mexico isn't one location. It's thirty-two.

IMCO, an independent Mexican think tank, compares every state and the major cities each year: on economy, infrastructure, labor market, society, rule of law, and governance. Choose the factor that matters for your project, filter by region, or see who is catching up.

  1. 1Mexico CityLeader in talent and higher education=
  2. 2QuerétaroAutomotive, aerospace, data centers▲ 4
  3. 3Nuevo LeónNo. 1 in innovation-sector complexity since 2006=
  4. 4CoahuilaExport powerhouse, automotive▲ 3
  5. 5Baja California SurTourism, relatively high wages, low informality▼ 3
  6. 6JaliscoDiversified economy, innovation▼ 2
  7. 7Yucatán▲ 3
  8. 8AguascalientesClosely integrated into North American supply chains▼ 3
  9. 9Quintana Roo▲ 12
  10. 10San Luis Potosí▲ 2
  11. 11Tamaulipas▲ 4
  12. 12SonoraIndustrial economy, highly educated workforce▼ 3
  13. 13Campeche▲ 6
  14. 14Nayarit▲ 8
  15. 15ChihuahuaExports: 108% of GDP, electronics and computers▼ 7
  16. 16Guanajuato▼ 3
  17. 17Baja CaliforniaExports: 78.6% of GDP▼ 6
  18. 18Tlaxcala▼ 1
  19. 19State of Mexico▲ 4
  20. 20Colima▼ 2
  21. 21Hidalgo▼ 7
  22. 22Durango▼ 2
  23. 23Sinaloa▼ 7
  24. 24Tabasco▲ 1
  25. 25Veracruz▲ 1
  26. 26Puebla▼ 2
  27. 27Chiapas▲ 5
  28. 28Zacatecas=
  29. 29Morelos▼ 2
  30. 30Michoacán▼ 1
  31. 31Oaxaca▼ 1
  32. 32Guerrero▼ 1

The notes under ten states show the strengths IMCO recognized them for on the index’s 20th anniversary.

▲ ▼ Places gained or lost vs. 2025 (overall ranking).

Rankings: IMCO, Índice de Competitividad Estatal 2026 (32 states) and Índice de Competitividad Urbana 2026 (72 cities, rank within size group). Regions: Senda grouping.

What this means for you: Querétaro is near the top of both rankings. But for your business case, what counts isn't the rank, it's your bottleneck: skilled staff, power, suppliers, or security. That's exactly what we check on the ground.

Sources: IMCO · IMCO · All sources

The catch

Mexico isn’t easy. But every risk is a variable, not a verdict.

We do not sugarcoat anything. But we do not reduce Mexico to its risks either. The right question is never whether Mexico has problems, but whether your location, industry, and operating model can handle them.

Power

Grid connection and supply vary by region, and green power is scarce.

For energy-intensive manufacturing, location becomes a power question: check the grid connection, own generation, and contract before capital flows.

Here the circle closes: German investment needs power and also brings technology that can strengthen Mexico's grid. On the German economy ministry's 2026 energy business mission, German suppliers saw opportunities in smart grids, storage, and distributed generation. A virtuous circle between Mexico and Germany.30

Water

Availability varies widely by region and industry.

If you factor water into the site choice from the start, it becomes an advantage.

Trade rules

The USMCA is reviewed every year.

If you know the scenarios early, you make better decisions on sourcing, manufacturing, and investment.

Labor costs

The working week is falling in stages to 40 hours by 2030. The minimum wage rose by 13% in 2026.

Calculate with the real cost of your skilled staff, not the minimum wage. That belongs in the business case. Open the Payometer

Permits

Requirements differ by activity, state, and operating model.

Knowing the local procedures saves time. Commitments belong in writing.

Contracts

Court disputes in Mexico can drag on for a long time.

Arbitration clauses, jurisdiction, and investment protection belong in the contract before anyone signs.

Security

The situation varies widely by region, industry, and route.

The right question is how your specific site, transport, and expatriate staff are set up.

Growth

GDP grew by only 0.5% in real terms in 2025.

The opportunity is not in the average, but in specific industries, regions, and supply chains.

Sources: Energía Hoy · Germany Trade & Invest · White & Case LLP · Holland & Knight LLP · Garrigues · Centro de Estudios de las Finanzas Públicas · All sources

Questions from the investment committee

The ten questions every investment committee asks.

Companies moving from Europe to Mexico don't ask romantic questions. They ask about operations, finance, and risk. Here are the questions and what is really behind them.

Operations and infrastructure

How reliable is the power and water supply for industrial processes?

What's really behind it: Bottlenecks in the CFE grid and water scarcity in the north are well known. The question is which industrial parks offer private substations or ready-made cogeneration plants.

How strong are local second- and third-tier suppliers?

What's really behind it: A European machine builder doesn't want to import every screw or heat treatment from Europe. The question is whether the Bajío or the north has ISO-certified workshops, or whether the supply chain has to be built from scratch.

Costs, finance, and returns

What do engineers and technicians really cost, adjusted for productivity?

What's really behind it: The minimum wage is irrelevant here. They need automation, mechatronics, and toolmaking specialists, compared against the hourly cost in Eastern Europe or Vietnam.

How do local tax rules and profit repatriation work?

What's really behind it: Tax regimes, double taxation treaties such as the one between Mexico and Germany, and a frictionless way to send dividends back to the parent company in Europe.

Risk, security, and law

How is the security risk managed for freight and for expatriate staff?

What's really behind it: Cargo theft on certain highways and their own government's travel advice. They expect clear protocols: gated industrial parks, escorted transport, secure routes to ports and the border.

What legal certainty and regulatory stability does the country offer in the medium and long term?

What's really behind it: Changes in energy and labour policy. The question is whether contracts and industrial property rights are protected by the international treaties in force.

Market and trade agreements

Which USMCA rules of origin apply for our product to qualify as “Made in Mexico”?

What's really behind it: Manufacturing in Mexico is of little use if exports to the US still pay tariffs because the share of European components is too high. What's needed is careful legal origin planning.

How long does it really take from the decision to the first part produced?

What's really behind it: Red tape for environmental permits, building licences, and SAT registration. Nobody wants a six-month project to become an eighteen-month one.

Culture and talent

How high is staff turnover in the main industrial hubs, and how can it be managed?

What's really behind it: In saturated regions such as Ciudad Juárez, Tijuana, or Monterrey, turnover can be destructive for a mid-sized company that invests heavily in technical training. They look for regions with a more stable labour market.

Is the right social infrastructure there if we send European engineers temporarily or permanently?

What's really behind it: International hospitals, bilingual schools, or German and French schools, such as those in Puebla, Mexico City, or Querétaro, and a good quality of life for executives.

Senda experts’ assessment, as of October 2026. We work out the answers for your company with you in the first phase, with sources.

The Senda question

Does Mexico pay off for your company? And if so, how do you enter the right way?

We work that out with you: first with numbers and sources, then on the ground. Opportunity without naivety, risk without paralysis.

Start the Mexico Self-Check

Sources and status of information

Every figure on this page and every answer from Miguel comes from these sources. Values marked “estimate by Senda’s experts” are practical reference values, not official statistics.

Show all sources
  1. Senda (own analysis of company information and trade press): DAX 40 companies with their own entity in Mexico (Senda research from company sources). As of 2026-10. Reliability: B (own research; evidence per company in Senda's working list).
  2. National Population Council (CONAPO), as reported by El Congresista: Proyección de la población de México a mitad de 2026 (CONAPO). As of 2026-01-06. Reliability: B (press, primary source official CONAPO projection).
  3. Institute for SME Research (IfM) Bonn: Kleine und mittlere Unternehmen: volkswirtschaftlicher Beitrag (Pressemitteilung IfM Bonn, verbreitet über idw). As of 2026-07-06. Reliability: A (research institute, official business statistics).
  4. German Federal Foreign Office: Deutschland und Mexiko. Bilaterale Beziehungen. As of 2026-10-01. Reliability: A (German federal government).
  5. German-Mexican Chamber of Industry and Commerce (CAMEXA): Startseite AHK Mexiko (Deutsch-Mexikanische Industrie- und Handelskammer). continuously updated. Reliability: A- (official German chamber abroad, own statement).
  6. Senda, estimate by Senda's experts: Strategic decision matrix: Mexico in industrial comparison (Senda expert assessment). As of 2026-10. Reliability: Estimate by Senda's experts (practical reference values, not official statistics).
  7. Holland & Knight LLP (international law firm): Mexico Retains Preferential Access Under USMCA Despite New U.S. Forced Labor Tariffs. As of 2026-07-23. Reliability: B (specialist law firm).
  8. Baker Botts LLP (international law firm): Trump Tariff Tracker, July 2, 2026. As of 2026-07-02. Reliability: B (specialist law firm).
  9. White & Case LLP (international law firm): USMCA 2026 Joint Review. United States declines to extend Agreement, triggering annual reviews. As of 2026-07. Reliability: B (specialist law firm, secondary; primary source USTR).
  10. Germany Trade & Invest (GTAI): Produktionsstandort Marokko. As of 2025-06-25. Reliability: A (German federal foreign trade agency).
  11. El Financiero (business newspaper, Mexico), citing U.S. Census Bureau data: México rompe récord y exporta 419 mil millones de dólares a EU en ocho meses. As of 2026-10-07. Reliability: B (business press, primary source U.S. Census Bureau).
  12. Congressional Research Service (U.S. Congress): U.S.-Mexico Trade Relations (In Focus IF11175). As of 2026-08-13. Reliability: A (U.S. Congress, official analysis).
  13. German Economic Institute (IW), Cologne: Deutsche Auslandsinvestitionen: Seit 2010 mehr als verdoppelt (Pressemitteilung zum IW-Report 39/2026, Samina Sultan, Jürgen Matthes). As of 2026-10-06. Reliability: A (economic research institute, Bundesbank data).
  14. Reuters, based on German Economic Institute (IW) calculations from Bundesbank data: IW: Deutsche Firmen drosseln USA-Investitionen um zwei Drittel (Reuters). As of 2026-08-17. Reliability: B (news agency, IW and Bundesbank data).
  15. Office of the United States Trade Representative (USTR): USTR Seeks Public Comment on the 2027 Joint Review of USMCA. As of 2026-10-02. Reliability: A (U.S. government).
  16. Office of the United States Trade Representative (USTR), Federal Register: Request for Comments on the Operation of the USMCA (Federal Register, 91 FR 63379, 5. Oktober 2026), verglichen mit der Bekanntmachung vom 17. September 2025. As of 2026-10-05. Reliability: A (U.S. government, official notice).
  17. Council of the European Union: EU-Mexico: Council gives final approval to modernised trade agreement" (Pressemitteilung). As of 2026-07-14. Reliability: A (Council of the EU).
  18. European Commission, Directorate-General for Trade: EU-Mexico Modernised Global Agreement. Agreement page and factsheet "General benefits. As of 2026-05-22. Reliability: A (European Commission).
  19. German Bundestag (hib 351/2022, Finance Committee): Doppelbesteuerungsabkommen Deutschland–Mexiko vom 9. Juli 2008, geändert durch Protokoll vom 8. Oktober 2021. As of 2022-07-06. Reliability: A (Bundestag).
  20. World Trade Institute (WTI), treaty database; UNCTAD Investment Policy Hub: Investitionsförderungs- und -schutzvertrag Deutschland–Mexiko (unterzeichnet 25. August 1998, in Kraft seit 23. Februar 2001). As of 2001-02-23. Reliability: A (treaty text in a treaty database).
  21. Secretaría de Economía (Mexican Ministry of Economy), reported by El Financiero: Inversión Extranjera Directa 2025 (Secretaría de Economía report, as reported by El Financiero). As of 2026-02-25. Reliability: A (official figure), reported via B (business press).
  22. INEGI (Mexico's national statistics institute): Registro administrativo de la industria automotriz de vehículos ligeros (RAIAVL), enero a diciembre de 2025. As of 2026-01-09. Reliability: A (official statistics).
  23. U.S. International Trade Administration (trade.gov): Mexico Country Commercial Guide: Automotive Industry. As of 2026-02-11. Reliability: A (government agency).
  24. Expansión (business media, Mexico): Del chip al data center: México exporta el boom de la IA, pero el mayor valor de la cadena sigue fuera. As of 2026-07-03. Reliability: B (business press).
  25. Mexico Business News, citing a Banco Base study: Mexico's AI Hardware Exports Overtake Vehicle Shipments. As of 2026-06-10. Reliability: B (business press, primary source Banco Base).
  26. Germany Trade & Invest (GTAI): Branche kompakt: Mexiko, Medizintechnik. As of 2026-03-05. Reliability: A (German federal foreign trade agency).
  27. Expansión (business media, Mexico), citing FEMIA data: México, indispensable para las exportaciones aeroespaciales de EU. As of 2026-03-03. Reliability: B (business press, primary source industry association FEMIA).
  28. IMCO (Mexican Institute for Competitiveness, independent think tank): Índice de Competitividad Estatal 2026 (ICE 2026), presentation and results. As of 2026-09-21. Reliability: A (recognized think tank, published methodology).
  29. IMCO (Mexican Institute for Competitiveness, independent think tank): Índice de Competitividad Urbana 2026 (ICU 2026). As of 2026-06. Reliability: A (recognized think tank, published methodology).
  30. Energía Hoy (energy trade media, Mexico): Empresas alemanas identifican nuevas oportunidades en México para impulsar la electrificación industrial. As of 2026-10-05. Reliability: B (trade press).
  31. Germany Trade & Invest (GTAI), Weltmarkt podcast: Podcast Weltmarkt, Folge 20: Mexiko, Einfallstor in die USA?. As of 2024-07. Reliability: B (expert interview in the federal agency's podcast, as of July 2024).
  32. Holland & Knight LLP (law firm): México promulga oficialmente la reforma constitucional para reducir la jornada laboral. As of 2026-03-05. Reliability: B (specialist law firm, reporting a constitutional amendment in the DOF).
  33. Garrigues (international law firm), based on the CONASAMI resolution: México. Acordado el incremento de los salarios mínimos para 2026. As of 2025-12. Reliability: B (specialist law firm, reporting an official resolution).
  34. Centro de Estudios de las Finanzas Públicas, Cámara de Diputados, based on INEGI: Estimación oportuna del PIB, cuarto trimestre 2025 (INEGI), Nota des Centro de Estudios de las Finanzas Públicas. As of 2026-01-30. Reliability: A (INEGI official statistics, parliamentary research service).