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Mexican automotive sector experts provide insight at Puebla event

Mexico Now magazine, the country’s primary maquiladora industry trade magazine held a conference focused on examining developments in the Mexican automotive sector in early December in the City of Puebla. Many of the experts in attendance provided insight into conditions existent in the country’s automotive sector at present, as well as where they see the industry heading over the remainder of the present decade.

Some of the speakers at the event highlighted the cost advantage of performing certain operations in the context of the Mexican automotive sector, rather than executing them in other global locations. For instance, Alfredo Espino of GE Capital commented upon the cost advantages of manufacturing plastic injection molded auto parts in Mexico. By his calculation, to do so results in a twenty percent cost savings relative to doing so in the United States. Leo Torres of the Ford Motor Company pointed out engineering services in Mexico can be accessed at a forty-six percent cost savings when compared to procuring them north of the border.

Volkwagen Mexico’s vice president of corporate relations and strategy, Thomas Karig, explained that, although, up until recently, Volkwagen AG’s Puebla plant had been importing most of its tooling, and related technical expertise, from the U.S. and Canada, availability of molds and tool makers in Mexico is improving. He pointed specifically to the fact that “in Puebla, we have two European tool makers setting up shop.” at present.

Other Mexican automotive sector experts pointed to passenger vehicle production investment that has occurred over the last several years. The Mexican Automotive Industry Association’s, executive director, Eduardo Solis informed those in attendence that capital inflows aimed at installing more automotive production capacity in Mexico between the years 2006 and 2012 totaled $US 13.2 billion dollars. This figure represented almost nine percent of all foreign direct investment in Mexico’s manufacturing sector during the stated period. He also cited that the Mexican automotive industry recently moved up a notch in terms of its ranking among global passenger vehicle manufacturers, moving from the ninth spot to the eighth position. Mexico now accounts for 3.3% of the world’s total automobile production. The country now exports five times the number of units as its largest Latin American competitor, Brazil, and is the fourth largest exporter of automobiles globally.

Oscar Albin, of Mexico’s national suppliers’ industry association, presented figures related to the production of parts by firms in the Mexican automotive industry. Albin stated that 2013 auto part production stands at a bit more than seventy-five billion dollars, and estimates that by the year 2019 that auto part production in Mexico should top out at just over ninety-one million dollars.

Although much of the part content of product assembled by the Mexican automotive industry is manufactured in the United States, some industry executives with plants located south of the U.S.- Mexico border are prioritizing the goal of increasing the percentage of locally produced material and component inputs into their end products. Audi Mexico’s CEO, Matthias Mueller, stated that it is company’s goal to boost local content incorporated into Audi passenger vehicles that are manufactured in Mexico to ninety percent.

Read the primary source for this post at Plastics News.

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