Want to Cut Costs by 40% – 50%? Here’s How Companies Are Doing It in Tijuana

Let’s talk about something exciting that’s happening just south of the border. Companies across industries are discovering that Tijuana, Mexico isn’t just a weekend getaway, it’s becoming their secret weapon for slashing operational costs by 20% or more.

Why Tijuana? It’s Kind of Perfect

Think about it: where else can you find a sweet spot that combines strategic location, skilled workers, solid infrastructure, and amazing trade incentives? Tijuana has quietly transformed into a powerhouse for advanced manufacturing, especially in industries like aerospace, medical devices, electronics, and logistics.

The numbers speak for themselves, studies show companies that move operations to Tijuana typically save 15-25% compared to keeping everything in the U.S. But how exactly are they pulling this off? Let me break it down for you.

8 Ways Companies Are Saving Big in Tijuana

1. Great Talent at Better Rates

Look, labor costs in Tijuana are up to 70% lower than in the U.S., with skilled technicians earning between $6.29 – $6.95usd per hour (fully burdened). But don’t get the wrong idea—this isn’t about cutting corners. Tijuana boasts a young, technically skilled, and often bilingual workforce, many educated at over 50 engineering-focused institutions. You’re getting top-notch talent at more competitive rates.

2. Tax Breaks That Make a Difference

Ever heard of the IMMEX program? It’s a game-changer. Companies operating under this maquiladora model enjoy:

• No VAT on temporarily imported goods
• Duty-free import of production equipment and materials
• VAT refunds in just 20 days (compared to 90 elsewhere in Mexico)

These tax efficiencies alone can shave millions off your annual expenses. Who doesn’t want that?

3. Quick Setup Through Shelter Services

Starting up in a new country can be daunting. That’s where shelter service providers come in. They handle all the legal, HR, and compliance headaches while you focus on your core business. Companies using this approach report savings of $1-1.5 million per year. That’s not pocket change!

4. Real Estate That Won’t Break the Bank

Industrial lease rates in Tijuana run about $0.68-$0.80 per square foot per month, significantly lower than what you’d pay in California or Asia. Plus, industrial-use electricity costs about 30% less than in places like Monterrey or the U.S.

5. Transportation Savings You Can’t Ignore

Here’s where Tijuana’s location shines; just 20 minutes from San Diego means same-day trucking to Southern California distribution centers. Compare that to Asia, and you’re looking at:

• 30% savings on freight costs
• Weeks saved in transit time
• Much less capital tied up in inventory

6. Affordable Back-Office Operations

Thinking beyond manufacturing? U.S. companies are setting up their admin, IT, and customer support operations in Tijuana to leverage the bilingual, tech-savvy workforce at 40-60% less than what they’d pay domestic teams.

7. Government Incentives That Sweeten the Deal

The welcome mat is definitely out. Federal, state, and municipal governments offer incentives like:

• 25-100% payroll tax exemptions (lasting 1-5 years)
• Training subsidies
• Discounts on water utility connections
• Fast-track permitting in industrial parks

8. A Ready-Made Manufacturing Ecosystem

With over 595 manufacturers and thriving clusters in aerospace, medical devices, and electronics, you’re plugging into a mature supply chain. This proximity means shorter lead times, more flexible production, and lower inventory needs.

Real Success Stories

Don’t just take my word for it. Look at DJO Global, they reduced lead times by 80% and boosted productivity at their Tijuana plant, which now outperforms all their other global facilities.

Or consider industry leaders like Safran and Honeywell in aerospace, or Samsung and Foxconn in electronics. They continue expanding their Tijuana operations because the combination of quality, compliance readiness, and available talent is too good to pass up.

The Bottom Line

Whether you’re looking to cut costs, increase agility, or reduce dependency on overseas manufacturing, Tijuana offers a compelling alternative. Companies that make the move aren’t just saving 40 – 50% on operations, they’re gaining a serious competitive edge.Are you ready to explore how Tijuana might fit into your business strategy? The Tijuana EDC is prepared to help with insights, connections, and turnkey solutions. Let’s talk!