Nearshoring in Automotive Engineering

Engineering Service Providers for Nearshoring to Mexico

The automotive industry contributes to one-fifth of Mexico’s overall manufacturing GDP, with Mexico being the 7th largest Vehicle Manufacturer and 5th largest exporter of Auto parts. The Mexican workforce ranked among the top ten most appealing workforce in 2022 according to the Total Workforce Index, owing to its abundant availability, effectiveness, forward-thinking regulatory frameworks, and enhancements in productivity. With a growing workforce of over 59.2M and almost a good even split of Men (59.4%) and Women (40.6%), Mexico is poised to make strides of change in Nearshoring.

With nearly all major automotive OEMs like Toyota, Ford, GM, Honda, Volkswagen, Mazda, Nissan, Stellantis, BMW, KIA, Tesla, Audi, and Renault each operating one or more manufacturing centres in the Mexico region, it is natural for Engineering to follow suite. In line with this, many of these OEMs like Kia, GM, Hyundai, Volkswagen, and Tiers (including solution providers) like Bosch, Continental, Denso, Valeo, Mahle, ZF, Tenneco, etc. have opened their Research captives in the Mexican region to reap the nearshoring benefits.

This trend suggests that Mexico is already a significant engineering hub, which has fuelled the engineering services companies to set up shop in Mexico and cater to growing needs. Almost 20+ leading Engineering services have Mexican entities directly supporting the customer or acting as their own Engineering Nearshore delivery centre.

Why Nearshore Engineering Services? A Win for Automotive Development

The most significant benefit of nearshoring is that the Automotive OEMs and their subsidiaries/ Engineering services providers are physically closer, reducing time zone discrepancies. Proximity and time zone alignments foster operational synergy, efficacy, team rapport, travel, and quality inspections easier.

Proximity and Collaboration
Cost Efficiency
Access to Talent
Risk Mitigation
Market Expansion
How Hinduja Tech help our clients do successful Nearshoring to save time and money?

Hinduja Tech Inc (HT), with its regional headquarters in Novi, MI, has been providing Product engineering solutions for the disruptive mobility segment for over 15 years in the North American region.

HT has been reactive to this nearshoring strategy, with its Mexico presence improving to 100+ resources over the last five years. HT is also planning to double the engineering workforce in 2025, move up the value chain, and bring high-value engineering to the Mexico region, which would assist its customers in localizing engineering capabilities.

With Practices such as the ‘Frugal EngiNEARing Paradigm’ and ‘zero-based design to cost process,’ HT is known for Cost Optimization in design as well as operations and passing on the benefits to the customer. Following these trends, HT has taken a unique approach to Nearshoring – with a blend of Off and Nearshoring, with 70% of engineering work executed in Mexico and the rest taken up with the support of Technical Experts from the Indian region.