News, Insights and Best Practices for Manufacturing in Mexico

Coahuila: the Detroit of Mexico

23 Apr 2014

Category: Automotive Manufacturing, Labor & Economics, Logistics Management, Manufacturing in Mexico

Coahuila is responsible for one-third of the steel produced in Mexico, according to The History Channel, and it is also responsible for much of the nation's automobile construction. As such, it is sometimes called the "Detroit of Mexico." Its capital city is Saltillo, and the population is about 2.4 million people.

One attribute of Coahuila that the Invest Coahuila Mexico Foundation (ICM), a group devoted to building up international investment in the state, emphasizes is its prime location. It is just south of the U.S., which makes it convenient and allows for easy transport into other parts of North America via roadways. Thanks to the North American Free Trade Agreement (NAFTA), tariffs on goods between the three North American nations (Mexico, the U.S. and Canada) are almost always dropped, so that goods and materials can be shipped back and forth across the border for the price of gas.

Companies that want to ship across the ocean can find access to nearby waterways. Coahuila is roughly in the middle between the Atlantic and Pacific coasts, allowing cars to drive to the ports at Mazatlán for access to the Pacific Ocean and Tampico for access to the Atlantic. There are also highways going south to Mexico City. Products can also be shipped by rail, as Coahuila has access to two major railway companies that pass through the state. It boasts five international airports, 52 industrial parks, and 88 universities.

Coahuila also has a strong workforce with experience in the industrial sector, such as automotive manufacturing. Relationships between unions and companies are table, according to ICM. Between 1998 and 2006, the state placed No. 1 nationally on productivity and competitiveness. On average, the workforce has 9.8 years of schooling, making it highly educated. Wages are low compared with other nearby Mexican states as well.

The History Channel reports that there are over 200 maquiladoras in Coahuila dedicated to stamping metal for cars, building engines and assembling vehicles. About 26 percent of cars produced in Mexico are build in Coahuila, ICM reports. That amounts to more than 480 vehicles per year. Companies in Coahuila include Chrysler, General Motors, Freightliner, Magna, Delphi, Lear and Stabilus.

Toyota has factories in Coahuila as well.

According to Miguel Hernandez, general manager of The Offshore Group's Manufacturas Zapalinamé, Coahuila has been manufacturing cars since General Motors first arrived in 1981. Since that time, the local leadership and school systems have both put together a lot of support for auto manufacturing, including educational and training programs.


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