The Shorcuts for Tier 1, 2 and OEM Automotive Companies in Mexico

We know that, as a Tier 2 company, it is challenging to meet the demand of your Tier 1 customer, but by making use of the VMI model and bonded model , you can store a safety inventory in Mexico.

Bonded warehouses are a good resource for entrepreneurs to start importing-exporting in a short period of time, simplifying procedures. In March of 2020, the US imports stood at $232.2 billions and exports at $187.7 billions.

There can be many advantages in using such services, for instance:

• You don't have to pay import taxes and duties.
• Your lead times will reduce considerably.
• You can monitor your inventory in real-time.
• You don't have to establish a facility in Mexico.
• No applicable VAT to your sales.
• Your merchandise is much closer to your Tier 1 clients.
  

The only costs you may need to cover, depending on the company that you decide to hire are: rack positions, floor space, light manufacturing, and quality inspections required by your company.

The automotive industry is large in Mexico, and it employs over one million people, producing 3.7 million cars every year and because of the treaties between Mexico, The United States, and Canada. The main auto parts must come from these countries to get duty-free access; therefore, it makes sense to do business in Mexico.

With these solutions available, your costs can reduce considerably without taking unnecessary risks that can result in breach of contract or damage of reputation.