IMPACT REPORT
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Despite the gradual global recovery following the COVID-19 pandemic, the automotive industry still faces large roadblocks in its road to pre-pandemic conditions. Semiconductor shortages and logistic hurdles continue, further fueled by the growing conflict between Russia and Ukraine. Still, many see light at the end of the tunnel as local and international supply chains push through. Amid this tumultuous period, local and international automotive industry insiders gathered at Mexico Automotive Summit 2022 to discuss today’s main trends, challenges and opportunities that have arisen over the past two years. Mexico’s automotive industry has continuously played an instrumental role in the national economic development. However, today’s rapidly changing environment makes collaboration and conversation between industry players everywhere, from manufacturers to innovators and regulatory authorities, imperative to maximize the chances of turning present challenges into future opportunities. Starting on March 23, the event’s panel discussions began with industry experts sharing their thoughts on the future of mobility, from manufacturing to regulation and accessibility. After that, speakers and panelists tackled the rapidly changing automotive environment through a focus on the electrification and the changing CASE mobility, OEM business models and vehicle ownership. The summit continued on March 24 with a focus on today’s most important innovations for automotive and auto-part manufacturing. From cloud solutions, robotics and lightweighting to additive manufacturing, public and private sector players shared their thoughts on the changing ways vehicles are made in the country despite supply chain shortages and thanks to international treaties driving in foreign manufacturing investment.
4
C onference I mpact
164
Breakdown by job title
companies
421
39% VP / Director 29% Manager 19% CEO / CFO / COO / DG / CM 7% Engineer / Analyst 6% President / Board Member / Partner
conference participants
67
speakers
7
sponsors
Conference social media impact 8,172 direct impressions during MAS
3,804
visitors to the conference website
Pre-conference social media impact 11,708 direct pre-conference LinkedIn impressions
3.13% click through rate during MAS
4.82% pre-conference click through rate
6.61% conference engagement rate
6.62% pre-conference engagement rate
Mexico’s leading B2B conference organizer introduces the world’s leading event networking platform. Delivering intent-based matchmaking powered by Artificial Intelligence that connects the right people. Network, no matter where you are.
229
participants
Matchmaking intentions
1,451
matchmaking communications
193
1:1 meetings conducted
837 Trading 176 Networking Total
1,257
137 Investment 64 Recruitment 43 Mentoring
5
C ompan y Attendance
•
Accudyn
•
CYF LOGISTICS
•
Acero Prime
•
Daimler
•
ADDEATON BY NUMALLIANCE
•
Disruptive Matters
•
AMDA, A.C.
•
Dobot
•
American Express
•
Eagle Industry Mexico
•
AMINSA
•
Eagle Tlaxcala México, S. De R.L. De C.V.
•
AMPIP
•
EDAG Mexico
•
AMT - The Association For Manufacturing Technology
•
E-DRIVE
•
Engie
•
ANPACT
•
Ericsson
•
Arbomex
•
ERM
•
ASCE Comunicación Estratégica
•
Evonik
•
ASCENCIO Comunicación Estratégica
•
Forefront Power
•
Asociación Mexicana de la Industria Automotriz, A. C.
•
Frio Express
•
Frost & Sullivan
•
Association for Advancing Automation
•
GALNIK, S.A.
•
Autocluster del Estado de Chihuahua
•
Garantiplus-Invarat
•
Autocosmos
•
General Motors
•
Autocosmos / grupo zapata
•
Giant Motors Latinoamerica
•
Automotive Cluster of San Luis Potosí
•
•
AWL
Gobierno de Ontario, Embajada de Canadá en México
•
Axon’ Cable
•
GRUPO SURMAN
•
Bancomext
•
Haitian CNC Machinery
•
Band of Insiders
•
Hinduja Tech
•
BASF
•
Hogan Lovells
•
BCG
•
Horizon Auto Logistics
•
Borgwarner PDS Irapuato
•
IBERDROLA
•
Bosch Mexico
•
INA - Industria Nacional de Autopartes
•
Brella
•
Infor
•
Bridgestone Autopartes
•
•
BTS
Instituto de Tecnologías Estratégicas para la Inteligencia de Negocios
•
DEVELOPMENT
•
Intermex
•
Camcar Grupo Automotriz
•
INVERS
•
CANACINTRA PUEBLA
•
Irizar México
•
Car Fast Automotores
•
JLR
•
Carl Zeiss
•
KASO & ASOCIADOS SA DE CV
•
CIAC
•
KIA MEXICO
•
CIRCUTOR
•
KPMG
•
CLAUT
•
Lavartex
•
clauteodmex
•
LeasePlan Mexico
•
ClikAuto Mobility
•
Link Engineering Company
•
Cluster Automotriz de Nuevo León, A.C.
•
LINK EV
•
Cluster Automotriz del Estado de Chihuahua
•
Logicalis México
•
Cluster de Herramentales
•
MaaS Global
•
CNW Courier Network
•
Mayoreo López Díaz
•
COFOCE
•
MBA
•
CONSTRUCTORA INSUR
•
McKInsey
•
Continental Contitech
•
McKinsey & Company
•
Corporación Zapata
•
Megaflux
•
Creative Foam de México, S. de R.L. de C.V.
•
Mercado libre
•
Cushman & Wakefield
•
Mercedes-Benz Autobuses
6
C ompan y Attendance
•
Metalsa
•
Stratasys
•
MexicoBusiness
•
TASSM
•
MexicoView
•
Tecma
•
Mexstamp
•
TecnoAp
•
Ministry of the Economy, Puebla
•
Tecnológico de Monterrey
•
MIRKA MEXICANA, SA. DE C.V.
•
TIBA
•
Mitsui & Co. Power Americas
•
TMF GROUP
•
Moplain
•
Top Management Mexico
•
MSI
•
Toyota
•
MUBEA
•
Trans-Matic Precision Metal Forming de Mexico
•
Nexu
•
•
Noba Consulting Latinoamérica, S.C.
Trefilados Inoxidables de Mexico - Grupo Novametal
•
OECHSLER MX
•
TSM Ramos, S.A. de C.V.
•
Omron
•
TTS México
•
Pirelli
•
Uber
•
POSCO
•
UKG
•
PwC
•
Ultatek Automation
•
Qualcomm
•
UNAM
•
RER Energy Group
•
Unicar
•
Rohde & Schwarz
•
Universal Robots
•
Roomie IT
•
Universidad Tecnológica de Coahuila
•
Sale-U México
•
VEMO
•
Scania México
•
VIAS3D
•
Schunk
•
VINCO Automotive
•
Sintermetal SA de CV
•
Wallenius Wilhelmnsen
•
Secretaría de Movilidad
•
Warren Industries
•
SELECSA
•
Wieland Metal
•
Serviacero Worthington
•
Services
•
SGS
•
WILLSCOT
•
Shift 3D
•
wolf design ltd
•
SIMSA
•
WTC Industrial
•
Skala Ventures
•
Yanfeng Mexico
•
Softtek
•
Zacua
•
Soloautos
•
ZF
•
Sonavox Mexico
•
Stellantis
7
P rogram D ay 1
09:00
MOBILITY AS A SERVICE
Speaker: Sampo Hietanen, MaaS 09:15
THE FUTURE OF MOBILITY
Moderator: Claudia Adriazola, WRI Panelists: Rodrigo Díaz, SEMOVI Fernando Enciso, Grupo Surman Gretta González, Uber Roberto Rocha, VEMO Sampo Hietanen, MaaS 10:00
A NEW GENERATION OF BUSES: TECHNOLOGY, EMISSIONS AND PASSENGER EXPERIENCE
Moderator: Miguel Elizalde, ANPACT Panelists: Jorge Navarro, Scania Mexico Alexandre Nogueira, Mercedes-Benz Autobuses Juan de Dios Gómez, Irizar Miguel Ángel Velasco, DINA Elena Donahue, ZF Group 12:00
CARBON REDUCTION THROUGH SMART FLEET MANAGEMENT
Speaker: J. Arturo Zapata, Corporación Zapata 12:15
THE CAR OF THE FUTURE: CONNECTED, AUTONOMOUS, SHARED AND ELECTRIC
Moderator: Lorena Isla, Frost & Sullivan Panelists: José Zozaya, AMIA J. Arturo Zapata, Corporación Zapata Felipe Gallego, Megaflux Electric Drivetrains Marco Galindo, KPMG 13:00
THE IMPACT OF CASE MOBILITY ON THE SUPPLY CHAIN
Moderator: Tarsicio Carreón, Chihuahua Automotive Cluster Panelists: Lourdes Cobos, Yanfeng Jerónimo García De Brahi, Disruptive Matters José Luis Treviño, Metalsa Daniel López, E-DRIVE 15:00
FUTURE-PROOF OEM BUSINESS MODELS MEXICO
Moderator: Kevin Laczkowski, McKinsey Automotive & Assembly Practice Panelists: Nazareth Black, Zacua Elías Massri, Giant Motors Latinoamerica Raymundo Cavazos, Volvo Car México 16:00
THE FUTURE OF VEHICLE SALES, OWNERSHIP & AFTERMARKET SERVICES
Moderator: Guillermo Rosales, AMDA Panelists: Iliana Vetrano,Mercado Libre Richard Farr, DiDi Fernando Enciso, Grupo Surman Karla Flores, LeasePlan Rubén Hoyo, Autocosmos
8
P R O G R A M D AY 2
09:00
MANUFACTURING DIGITALIZATION AND CLOUD SOLUTIONS
Moderator: Enrique Espino Barros, NOBA Panelists: Federico Crespo, Valiot Marcelo Saparrat, Tecnoap José Rivero, Infor Miguel Villalpando, Vias 10:00
ROBOTS, COBOTS AND MANUFACTURING AUTOMATION
Moderator: Marco Galindo, KPMG Panelists: Felipe Rivera, Mitsubishi Electric Jeff Burnstein, Association for Advancing Automation (A3) Mexico Abraham Sosa, Universal Robots Aldo Luevano, Roomie Mauricio Blanc, Omron Americas and Omron Automation Mauricio Rosales, Zeiss Industrial Metrology 12:00
BUS, COACH INNOVATION DRIVING SUSTAINABLE MOBILITY
Speaker: Juan de Dios Gómez, Irizar 12:15
LIGHT WEIGHTING FOR EV, ICE EFFICIENCY
Moderator: Vishwas Shankar, Frost & Sullivan Panelists: Martín Toscano, Evonik Industries de Mexico Saulo Guzmán, Wieland Group Juan de Dios Gómez, Irizar Alex Elías Zúñiga, Tec de Monterrey 13:00
ADDITIVE MANUFACTURING: NEXT MANUFACTURING FRONTIER
Moderator: Sebastian Romo, Tridi Mx Panelists: Fadi Abro, Stratasys Leopoldo Ruiz, UNAM Octavio Pichardo, General Motors 15:00
CASE STUDY: EMPLOYEE & COMMUNITY ENGAGEMENT
Speaker: Mario Rodríguez, Arbomex 15:15
SUPPLY CHAIN RESILIENCE AND TRANSFORMATION
Moderator: Alberto Bustamante, INA Panelists: Manuel Montoya, Automotive Cluster Network Miguel Ángel Alcaraz, McKinsey Alberto Torrijos, Deloitte Karen Lellouche, BCG Francisco Bautista, EY Martín Toscano, Evonik Industries de Mexico Carlos Zegarra, PwC 16:15
MEXICO MANUFACTURING DONE RIGHT: LOCATION & REAL ESTATE
Moderator: Claudia Esteves, AMPIP Panelists: Eduardo Infante, Government of Aguascalientes Víctor Benavidez, TIBA Salomón Noble, Intermex Alan Russell, Tecma
9
C onference H ighlights MOBILIT Y AS A SERVICE TO RESHAPE THE AUTOMOTIVE INDUSTRY While the automotive industry undergoes
transportation costs, whereas private cars
on e of it s la rgest tra nsformations in
are in use during 4 percent of their life cycle,
history, mobility as a service (MaaS) is
said Hietanen. Regarding sustainability, in
set to crystallize the evolution of vehicles
the EU, 40 percent of carbon emissions are
and mobility solutions from a product to a
generated by traffic, according to strategic
service, said Sampo Hietanen, Founder and
consulting firm Frost & Sullivan. Moreover,
CEO, MaaS Global and Whim.
38 percent of car owners would give up their vehicle if they could, taking 70 million cars
MaaS is a concept that encompasses
off EU roads, according to the firm.
all transpor tation options, public and p r ivate , u n d e r a si n g l e s c h e m e th at
Whim is currently available in the cities of
simplifies movement from one point to
Vienna, Antwerp, Helsinki, Turku, Tokyo
another. MaaS relies on a digital platform
and Birmingham, and nationwide across
that integrates end-to-end trip planning,
Switzerland. “We want to make mobility
booking, electronic ticketing and payment
smoother, everyday life easier and our
services across all modes of transportation,
cities greener,” said the company. Although
according to Deloitte.
Mexican culture has historically favored t r a d i ti o n a l c a r ow n e r s h i p , “ yo u n g e r
Since 2016, MaaS is a reality for Helsinki
generations would like to get rid of vehicles,”
residents who can use the Whim app to plan
said Hietanen, who added that 24 percent of
and pay for all modes of public and private
Whim users said that the app helped them
transportation within the city, whether by
to get rid of their own cars. In addition, 62
train, taxi, bus, carshare or bikeshare. “[If
percent of Whim’s total userbase use it for
you give up on your car,] I promise to get
all their travel needs.
you anywhere you want, anytime,” said Hietanen. Users in the EU can pre-pay the
While all the necessary components for
service as a monthly mobility subscription
the implementation of MaaS are already
similar to Netflix’s, choosing the package
available, there are several challenges to
that best fits their mobility needs, he
overcome, said Hietanen. The first step
explained.
to achieve this interconnected world is to combine cars, car rentals, bikes, trains and
“The tricky part is that the whole industry has a logic of doing everything on their own. Nobody has enough capacity alone. We need to form a competitive ecosystem.”
subways in a simple, one-stop-shop, said Hietanen. “The tricky part is that the whole industry has a logic of doing everything on their own. Nobody has enough capacity alone. We need to form a competitive ecosystem.” Collaboration between industry
Sampo Hietanen
players, cities and governments is crucial,
Founder and CEO | MaaS Global
with a customer-centric approach, no exclusive deals, local transportation on board and open ecosystems, said Hietanen.
The market of MaaS will see exponential
Whim’s business model is based on fixed
growth in the near future, said Hietanen. In
subscription pricing open to add-ons,
the EU, people spend around 20 percent
said Hietanen. Whim pays for transport
of their household income on mobility
consumption in subscriptions and makes
and the average monthly cost of owning a
money from under-use, while offering the
car is €616 (US$678), according to Whim.
shift to more sustainable and less expensive
Private car share makes up 76 percent of all
modes, such as bikes, which are highly
10
C onference H ighlights accepted by the public, he added. “Every
The future of the automotive industry is
time I take you on sustainable means of
MaaS, said Hietanen, and called on all actors
transportation, I lower the production cost
from the sector to get involved. “This is a
and increase the revenue.”
change that no one can take alone.”
THE FUTURE OF MOBILITY NEEDS COLLABORATION As sustainability becomes a key focus across
model, he added. To meet that demand,
different industries and governments,
manufacturers and dealers must continue
global mobility is one of the largest areas of
building and distributing eco-friendly
opportunity to reduce carbon emissions and
vehicles but local governmental authorities
maximize equal access to services. Some of
must also help promote these technologies
the primary strategies for doing so is the
following the example of countries in North
expansion of EVs and the replacement of
America, Asia and the EU.
personal vehicles with public transportation or rideshare apps . But for the timely
Some cities in Finland, for example, have
deployment of these and other innovations,
successfully merged most mobility options
collaboration between public and private
into a single service, said Sampo Hietanen,
sectors is key.
Co-Founder and CEO, MaaS Global and Whim. Hietanen acknowledged the large
Alth o ug h m aximizing E V a ccess a n d
differences between Finland and Mexico
mobility is a key global focus for reducing
that limit mirroring some of the former’s
transportation carbon emissions, EVs in
fiscal incentives for the increased purchasing
Mexico face a different environment. The
of EVs or hybrid models. Instead, Mexican
lack of charging stations and high market
efforts should be led by collaborations
prices have led consumers to consider them
between different industry players, as the
luxury vehicles, so EVs continue to play a
automotive industry has been known for
minor role in total automotive purchasing
operating through closed environments in
compared to other countries. As such, the
which individual goals are prioritized before
future of sustainable vehicle ownership will
innovation and equal access.
instead consist of the larger distribution of hybrid models, said Fernando Enciso, Group
Additionally, “The biggest innovations
Director, Surman.
happen when smart regulation exists,” Sampo explains. The collaboration between
“Hybrid vehicles are pushing governments to invest without risking losses due to lack of chargers… Hybrid vehicles are pushing the transition,”
the private and public sector is necessary so the future of mobility arrives efficiently and common industry goals are met. But to achieve these successful collaborations, the private industry must do its part in
Fernando Enciso
prioritizing goals beyond generating profit,
Director México | Surman
said Rodrigo Díaz, Deputy Minister of Planning, Policies and Regulation, SEMOVI. An example of a successful collaboration can
“Hybrid vehicles are pushing governments
be seen through the one between Mexico
to invest without risking losses due to lack of
City’s government and Vemo, through which
chargers… Hybrid vehicles are pushing the
electric buses were introduced to the city’s
transition,” Enciso said. Dealerships are also
Metrobus system. This is one of the best
contributing to this effort by focusing on
examples of efficient and eco-friendly public
rolling out models with cleaner technologies,
transportation in the city, said Díaz. “We
which meet the increasingly popular interest
have had good experiences with the private
of owning an environmentally-friendly
sector in mass transit… The good news is
11
C onference H ighlights that in Mexico, two-thirds of motorized trips
ecosystem is today, collaboration is key,”
are made by public transit. The goal is to
said Rocha.
improve the fleet and services,” he said. Re g a rdin g p u blic a n d p rivate se c to r However, Díaz highlighted the importance of
collaboration, Gretta Gonzalez, General
including non-urban regions in the country,
Manager, Uber, argued for the inclusion of
particularly in the South, in the mobility
private companies in regulatory processes
transformation. With the arrival of digital
because technology tends to arrive before
innovations, accessibility will be the ultimate
regulation, which is why it is important for
consideration in determining the efficiency
all players to be able to contribute to these
of the country’s mobility transformation.
processes. “It is in the best interests of everyone to sit and discuss the right way
Vemo achieved several milestones in
to bring mobility to cities,” Gonzalez said.
electrif ying transportation services by
Uber is committed to limiting CO2 emissions
working not only with local governments but
globally by 2040, a large effort that will
also with private mobility service providers,
require collaboration to transform mobility.
said Co-Founder and CEO Roberto Rocha. A collaboration between Vemo and Uber led
Already, younger generations prefer using
to the introduction of Vemo’s EV services
ride share apps over purchasing and owning
in the highly popular Uber platform. This
a vehicle of their own. But for these trends
type of collaboration is key for additional
to continue expanding, further collaboration
future successes. “At the stage at which the
between all industry players is needed.
SUSTAINABILITY, EXPERIENCE, TECH: THE FUTURE OF BUSES Mobility demand and behavior changed
industry must be flexible to adapt to recent
due to the COVID-19 pandemic, resulting in
changes in mobility.
a reduction of capacity and the integration of new technologies, flexible solutions and
To adapt to new consumer demands and
sustainable practices in collective mobility.
transportation needs, collective mobility
To move forward, there are several solutions
companies could rely on digital telematics
and areas of opportunity in the market.
and e-commerce, said Elena Donahue, Head of Commercial Vehicle Aftermarket and Fleet
Collective mobility solutions are recovering
Business, ZF Group. “The level of integration
in the new normal. During Jan. and Feb. 2022,
that vehicles have in this new economy of
bus utilization recovered by 7.2 percent in
movement will lead new generations to
comparison to the previous year, explained
recognize them as a service platform, much
Miguel Elizalde, Executive President, Buses,
more than a means of transportation from
Trucks and Engines Manufacturers National
point A to B,” said Donahue.
Association (ANPACT). “There are no public policies to promote mobility in Mexico. The
As this industry reaches pre-pandemic
General Law of Mobility and Road Safety
levels, customer needs begin to tie in with
is still being discussed in the Chamber of
other requirements such as biofuel, new
Deputies and there are no local incentives
technologies for end users and EV use.
that spur mobility,” he said.
Miguel Angel Velasco, General Director, Dina Camiones, breaks down the six fundamental
The General Law of Mobility and Road Safety aims to establish the bases and principles to guarantee the right of every person to mobility in conditions of road safety, accessibility, efficiency, sustainability, quality, inclusion and equality. However, both the law and the
pillars to improve for customer experience: 1.
Hyper connectivity through universal Wi-Fi
2.
Sharing economy automation
3.
AI and machine learning for better analysis
12
C onference H ighlights 4.
Adaptability to sustainability demands
5.
Better services that derive from the growth of the middle class
6.
Promotion of innovation
robust infrastructure in the transformation of individuality into the collective. One way to immediately improve end-
C o u p l e d w ith th e s e n e e d s , m o b i l it y
user experience is with digitalization and
companies face several challenges including
recognition that 60 percent of Mexicans have
employee turnover, safety problems and an
smartphones. Through them a company can
urgent need to reincorporate the drivers
“provide all the possible information about
that were laid off during the pandemic, said
their trip and the accessories of their trip,
Jorge Navarro Inostroza, Director of People
such as stores, purchases and other benefits
Transport Solutions, Scania México.
and facilities,” said Donahue. Companies have to be multifaceted and identif y
The creation of novel experiences is also
demand and behavior changes constantly
pivotal for companies in this journey. “There
to obtain financial benefits, she added.
are already new companies offering virtual mobility solutions to customers that allow
For longer term goals and requirements
them to skip visiting bus terminals; it is
such as sustainability, companies can begin
like uber for buses,” shared Juan de Dios
with small changes that escalate into entire
Gómez, General Director, Irizar Mexico. “This
operations. For example, Irizar achieved a
shows that operators are highly adapted to
10 percent improvement in fuel efficiency
digitization and know their users and trends,
by analyzing aerodynamics, using lighter
[catering to them through] smaller but more
steel and integrating recyclable materials,
practical boarding points.”
Gómez said. However, fuel efficiency is still one of the largest challenges for buses and
For public transportation, trends are similar:
collective mobility.
“as the backbone of economic and personal development, [public transportation] must
Data is another long-term commitment that
be sustainable, clean, safe, accessible and
has the potential to spur “better management
efficient; it should be central to social and
and indicate ways to create better services.
economic development,” said Velasco. In
By integrating tech and becoming an
the improvement of public transportation,
intelligent transportation industry, we will
fi n a n c i a l i n c e n ti ve s c a n l e a d to t h e
be more profitable, reduce operating costs,
adoption of clean technologies and service
schedule timely maintenance and consume
digitization, leading to the creation of
less energy,” said Velasco.
13
C onference H ighlights Infrastructure can also be a detonator for the
we have power outages that last four hours,”
changes that the industry wants to bring, or
said Gómez.
it can hinder them. “If cities do not have the road and digital infrastructure to support
Mass electrification in Mexico is not just
our innovation, its effects will be precarious,”
a matter of subsidies. There is no legal
said Alexandre Nogueira, President and
framework that guarantees a second life of
Chief Executive Officer, Mercedes-Benz
batteries and “there is no one responsible
Autobuses. Infrastructure is also a barrier for
for their final disposal,” said Inostroza.
electrification as it is necessary to improve systems so they use lanes, GPS controls
To succeed in the new era of collective
and bus monitoring efficiently, said Gómez.
transportation, mobility has to be put at
To date, only Mexico City and Monterrey
the center of economic and social public
seem to have this kind of infrastructure,
policies as it is a service that facilitates
he added. In Irizar’s experience, when the
access and interconnectivity, according
“electrical infrastructure is unsustainable,
to Donahue.
REDUCING CARBON FOOTPRINT THROUGH SMART FLEET MANAGEMENT Fleet management is becoming increasingly
with world leaders since 1972, aiming to
essential for the automotive industry, while
build a mitigation plan to address challenges
the smart practice of fleet management
ahead. In 1988, the Intergovernmental Panel
has become crucial in the battle against
on Climate Change (IPCC) was created and
climate change, said Arturo Zapata, CEO,
in 1994, the UN began hosting high-level
Corporación Zapata.
meetings called Climate Conferences (COP) to address this matter.
“Smart fleet management faces many challenges everywhere, yet Mexico presents
Countries’ efforts to fight global warming
a particularly challenging environment today
have been mirrored by the private sector.
with new vehicle scarcity, rising interest
“The list of companies who have publicly
rates, crime, Carta Porte requirements and
committed to significantly reducing their
Rule of Law challenges. We need to start
carbon footprint is already in the tens of
addressing climate change. The evidence is
thousands,” said Zapata Companies are now
overwhelming,” said Zapata.
required to measure the carbon footprint of their suppliers in addition to the variables
The impact of human activities on climate is
that they directly control, he added.
well documented and led organizations such as the UN to join forces with several countries
Companies worldwide are integrating
to fight climate change, as reported by MBN.
Environmental, Social and Governance
The UN has launched a series of meetings
( E S G) p r i n c i p l e s i nto th e i r b u s i n e s s strategies. In Mexico and Latin America, this implementation is often carried out
“Vehicular natural gas is a lot friendlier to the environment than other commonly used fuels today. It is up to 50 percent cheaper than gasoline or diesel and is considered a clean fuel.”
J. Arturo Zapata CEO | Corporación Zapata
in response to corporate requisites. Public companies of local origin have also begun deep diving into critical strategies and reporting based on pressure from financial institutions and their competitors. However, organizations of all sizes are also getting involved in this critical yet complex journey to manage investor, consumer and NGO expectations.
14
C onference H ighlights Companies worldwide are integrating ESG
solutions to maximize profits while reducing
principles into their business strategies.
their carbon footprint, as reported by MBN.
The idea must be “to make sustainability profitable and profitability sustainable,
In addition, the current distribution fleet
without sacrificing one for the other,”
must transform into a hybrid model that
said Zapata quoting Christian Klein, CEO
uses 50 percent diesel and 50 percent
and Member of the Executive Board, SAP.
natural gas, said Zapata. “Vehicular natural
Every publicly listed company or “any of us
gas is a lot friendlier to the environment
whose customers are large or medium-sized
than other commonly used fuels today. It is
corporate companies will most certainly be
up to 50 percent cheaper than gasoline or
asked by the end of this current year to share
diesel and is considered a clean fuel.”
what we are doing in terms of reducing our carbon footprint,” said Zapata.
The D-Gid System
The automotive and mobility industries play
Italian firm Holdim Group teamed up with
an essential role in reducing carbon emissions.
Corporación Zapata’s subsidiary Nortrack
Smart fleet management tackles several
to develop Ecomotive Solutions, which
variables that reduce companies’ carbon
specializes in improving the environmental
footprint, such as fuel costs, environmental
performance of every engine type through
control, route optimization, driving behavior,
alternative fuels, said Zapata. “Our D-Gid
future autonomous vehicles, EVs, security,
technology delivers the optimum mixture
hygiene and vehicle digitalization, said Zapata.
of diesel and natural gas in a dynamic way,
The implementation of these technologies
maintaining performance and efficiency of
is no longer a luxury and has become a key
the engines. Our dual fuel hybrid technology
resource for companies to smartly manage
can be used in any diesel engine and can be
their assets with positive cost-benefit
applied in any industry.”
THE CAR OF THE FUTURE COULD BE DEVELOPED IN MEXICO Once considered the “car of the future,”
The country has only 2,100 electric chargers
electric vehicles (EV) are now a reality
while the US has 42,500, making EVs an
and are becoming increasingly popular
inconvenient option for the everyday driver.
among consumers, manufacturers and
Furthermore, the lack of governmental
governments looking to reduce carbon
regulation and collaboration between the
emissions in transportation. While Mexican
public and private sectors blocks Mexico’s
adoption of EVs has lagged behind for
EV future, explained Zozaya.
numerous reasons, industry experts believe that with the proper handling by the public
Fiscal incentives could boost the adoption
and private sector the electromobility
of EV across Mexico and change the current
transformation can catch up.
perception that these are “luxury vehicles.” However, these credits have to be carefully
Infrastructure challenges stand in the way
developed and applied. For example, the
of the adoption of EVs by Mexicans. “Mexico
fiscal incentives proposed by US President
is lagging behind in electric transportation
Joe Biden for the acquisition of EVs have
infrastructure. The country committed at
been harshly criticized by both the Mexican
COP to stop producing ICE vehicles by
industry and government due to their
2040, so time is short. The main issue is
alleged discriminatory nature. These credits
coordination… authorities have to lead in
would only benefit US-union made EVs,
this area because the transition involves
going against the USMCA.
numerous issues such as the implementation of public policy,” said José Zozaya, Executive
Au to m a ke r s h ave a l re a d y p l aye d a n
President, AMIA.
undeniable role in widening access to EVs,
15
C onference H ighlights
advancing the country closer towards an
not be ready. It is not just about accessing
electromobility transformation despite
a vehicle; it’s about being ready to use it,”
infrastructure and regulatory challenges.
said Gallego.
However, misinformation regarding the current status of this transformation could
Anoth e r tre nd infl ue ncing th e c a r of
end up being another challenge to its further
th e f uture is th e use of a utonomo us
progression. “There is a general perception
technologies, which could greatly reduce
that Mexico is lagging behind in electric
road accidents. However, Mexican roads
transportation alternatives. Nothing is
are highly different from those in countries
further from the truth. Mexico is already on
where these technologies are already being
the path toward electric mobility,” said José
implemented. Driver behavior also plays a
Arturo Zapata, CEO Corporación Zapata.
role. Drivers in areas that use autonomous driving often travel different distances on
Zapata pointed toward JAC’s EV model
average and do so with different behaviors,
that is available in Mexico for MX$450,000
m e a n i n g t h a t M ex i c o m u s t d eve l o p
(US$22,282) and has allowed the Chinese
autonomous technology of its own. “We
company to become a leader in EV sales
have to create vehicles that are suited for
in the country. Other players are jumping
our market so we can ease the adoption,”
in the electromobility train. Tesla’s EV
said Gallego.
rideshare platform Beat has 230 vehicles providing transportation services in Mexico
Industry leaders are excited about the
City while retail giant Liverpool purchased
opportunities on the horizon, found KPMG’s
15 fully electric vans for last mile distribution
22nd survey of the auto industry worldwide.
services and has already ordered another
But as with any transformation, there will
20. Liverpool uses EV to capitalize on the
be losers and winners, said Marco Galindo,
boom of e-commerce and last mile logistics
Aguascalientes Managing Partner, KPMG.
the country has experienced since the start
For that reason, rapidly taking immediate
of the pandemic, but electric bus adaptation
executive decisions is even more critical.
presents challenges of its own, explains Felipe Gallego, COO and CTO, Megaflux
“ N owadays , the political pressure on
Electric Drivetrains.
companies to implement ESG and decarbonization strategies is transforming
A common challenge companies face when
the automotive business,” said Galindo.
adopting EVs is the lack of the proper infrastructure to charge them. “Now you
Mexico is one of the global leaders of ICE
have to think about installing 10-20-50
vehicle manufacturing but automakers
chargers on your facilities, consuming
have to be prepared to switch gears if they
megawatts of power that might not be able
wish to continue with this momentum as
to be recouped. The infrastructure might
market demand shifts from ICE models to
16
C onference H ighlights EVs. There is a great difference between
right time to take action as Mexico has
th e m a n u f a c t u r i n g a n d co m p o n e n t s
an opportunity to become a leader in EV
needed for each, meaning some plants
manufacturing and supply the car of the
must begin preparing for almost entirely
future to international markets.
different processes. However, now is the
CASE MOBILITY IS TRANSFORMING THE SUPPLY CHAIN The pandemic and the growing adoption
Jeronimo García De Brahi, Co-founder and
of connected, autonomous, shared and
CEO, Disruptive Matters. Supply chains are
electric (CASE) vehicles are disrupting
becoming complex and must be supported
global supply chains, affecting the main
by p o l i c i e s , g ove r n m e nt re g u l ati o n s
suppliers of many manufacturing sectors
and sustainability to operate correctly,
including the automotive industry. This has
said García.
pushed the industry, especially suppliers, to consider the technological and regulatory
Mexico’s strategic partnership with its
landscapes and consumer preferences to
northern neighbors through the USMCA
develop realistic models to streamline EV
gives the country an opportunity to move
adoption in key markets.
from a globalized supply chain to a local, regional supply chain . The pandemic
The road to mainstream EV adoption may
highlighted the fragility of global supply
be lengthy, as these vehicles represent only
chains, especially when they depend on
2 percent of all global vehicles. However,
materials and components manufactured
the long vehicle development cycles and
on the other side of the world. The chain
lead times mean that important decisions
can always break at the weakest link but it is
and investments are already being made.
worse when it breaks far from where a part
According to PwC, auto companies continue
or vehicle is assembled. When this happens,
to invest heavily in the technologies that
“it becomes a complicated problem that is
will power the vehicles of tomorrow, even
expensive to solve,” said García.
though they are unlikely to see returns on those investments anytime soon. So far,
This is causing manufacturers to regionalize
Reuters explains, automakers have spent
production to have their suppliers closer
US$90 billion in EV-focused research and
to their manufacturing plants. As a result,
development.
“we are expecting nearshoring in the North American region and [companies]
Despite the challenges, the shift to CASE
are choosing Mexico in many cases as
vehicles is already underway. “Modern
a destination for their production and
cars have some level of autonomy and
supplies,” said José Luis Treviño, Vice
that is impacting the value chain,” said
President, Strategic Planning and Corporate Development, Metalsa.
“We are expecting nearshoring in the
This partly explains why the production of
North American region and
auto parts is growing despite the drop in
[companies] are choosing Mexico in
the production of vehicles. The other reason
many cases as a destination for
is that an increasing number of parts used
their production and supplies,”
to produce vehicles in the US are being
José Luis Treviño Vice President, Strategic Planning and Corporate Development (M&A) | Metalsa
manufactured in Mexico. For that reason, Mexican manufacturers could benefit from being more ambitious and incorporating more capabilities, said Daniel López, CoFounder and CCO, E-DRIVE.
17
C onference H ighlights For CASE manufacturing, for example,
this position, nurturing these factors is
“ e l e c t r i fi c a t i o n i s h a r d t o fi n d a n d
fundamental for Mexico and its automotive
forget about a provider that integrates
companies,” he said.
AI with e n e rgy a n d oth e r signifi c a nt components,” said López. To succeed in
CASE vehicles still pose a challenge for the
CASE manufacturing, Mexico needs to
Mexican industry. “From passenger vehicles
take advantage of its strategic location,
to public and commercial transportation,
regionalize its supply chain, strengthen its
we have to begin investing in our own
automotive clusters and reskill its workforce
ch a rgin g te ch n o lo gy a n d n et wo rk s ,”
in the supply chain, he added.
explained López. Tesla, said López, invested in charging infrastructure and now has
The interior design of C A S E vehicles
super-fast charging facilities. Mexico has
also needs to evolve because drivers
over 4,000 free charging stations but it
are looking for more. “They want more
needs more, he added. Moreover, the sector
c o m f o r t , s m a r t m e c h a n i s m s , l u x u r y,
needs to simplify the charging process
lighting, smart cabins or less heavy cars,”
to make it easier for people to join the
said Lourdes Cobos, General Manager,
electrification wave.
Yanfeng. The Chinese automotive supplier works with local interior designers to
To turn those challenges in opportunities,
develop models that fit ever y countr y
García suggest six points:
it works in. “For the company, it is very important to work with Mexican talent, so we made the commitment to always retain our talent,” said Cobos.
1.
Be open to de-branding processes as collaborations become more common.
2.
Be aware and ready for OEMs to become technology and platform developers.
3.
Welcome Tier 5.0 for vehicle integration.
Retaining talent has been part of
4.
Use giga factories to supply regions.
the foundation of Mexico’s successful
5.
Disrupt sales and distribution through e-commerce.
6.
Use over-the-air services in the aftersale and reduce the physical maintenance of the car.
a u to m otive i n d u s tr y, w h i c h h a s a l s o benefited from its location and strategic alliances, said Tarsicio Carreon, President, Chihuahua Automotive Cluster. “To keep
OEMS TO SHIFT BUSINESS MODELS, WELCOME TRANSFORMATION OEMs are changing their business models in
The current OEM business models are
Mexico and across the world amid one of the
not long-term sustainable, said Nazareth
largest industry transformations in history.
B l a c k , C EO , Z a c u a . T h e a u to m o ti ve
Electrification, digital services, vehicle
industry was already experiencing a digital
ownership changes and data have become
transformation; however, the pandemic
the main drivers of this transformation,
accelerated it and now OEMs need to have
agreed industry experts.
robust digital strategies and platforms and change the way they work in-house,
“Things are moving very fast. The global
she added.
economy is shifting, as well as consumer preferences around ownership and
Zacua is a Mexican OEM focused on EV
sustaina bilit y. Th ese t wo fac tors a re
development that designs and produces
transforming many industries, including the
urban, zero-emission small vehicles. The
automotive sector, which has been the same
company started production in the country
for many years. Now, it is time to change
in 2018, the same year it released its first
and be part of a sustainable growth,” said
two models: the M2 and M3. Both models
Raymundo Cavazos, Managing Director,
are manufactured at Zacua’s facilities in
Volvo Car México.
Puebla. While Zacua does not compete at a
18
C onference H ighlights global stage yet, its small size is a strength
preparing for electrification. By 2030, 100
that has allowed it to grow in a cooperative
percent of our global sales will be of EVs.
way, said Black. “We created an ecosystem
This is not part of the strategy; it is the
where cooperation with bigger players from
strategy.”
all around the world is possible. Instead of competing, [OEMs’ business models] should
Mexico is still undergoing a slow transition
seek to join and cooperate, either going
to electrification, said Black. While HEVs
abroad or inviting others to the country.”
have been successful in the market and will remain stellar during the short-term, in the
Changes in the automotive industry used
midterm “people will jump directly to EVs,”
to take a lot of time, said Elias Massri, CEO,
she added. Before the pandemic, from the
Giant Motors Latinoamérica. However, the
1.5 million vehicles sold in 2019, only around
past three years have been “surprising” and
300 were EVs, according to Black. During
the Mexican auto sector has grown in all
the pandemic, the figure increased to 800
regards, he added. “Technology is not new;
EVs sold and by 2025, EV sales will make
it is just improving very fast. We started
up 3 to 4 percent of total light-vehicle sales,
several years ago in a project with Bimbo,
amounting around 50,000 units, she added.
utilizing lead acid batteries, which gave us a 60-kilometer autonomy at the time.”
Although people usually point to charging infrastructure as the main challenge for
Giant Motors Latinoamérica is a Mexican
the adoption of EVs in Mexico, the real
automotive assembly company focused
problem is education and financing, said
on the production of commercial and
Black. “In Mexico, the incentive [to buy EVs]
passenger vehicles for the Mexican market.
is more financial than ecological, following
The company partnered with China’s JAC
gasoline cost increases and even shortages.
Motors in 2017 to assemble and market the
It is crucial to work on education as a
latter’s passenger vehicles in Mexico. “Today,
tool to raise awareness and a sustainable
we have 42 dealerships across the country.
mobility culture.”
In 2019, we introduced the full line of (JAC’s) EVs to challenge the Mexican market and
While electrification usually takes the
break some myths, such as Mexico not being
spotlight of automotive trends, OEMs have
suitable for this technology or not having
also shifted toward becoming mobility
enough infrastructure,” said Massri.
providers rather than automakers. This shift from “hardware” sellers to solution providers
Electrification plays an essential role within
has led OEMs to ally with technology
Volvo Car, both internationally and in the
companies to offer more advanced digital
Mexican market, said Cavazos. “We are
services. In Jan. 2022, Volvo Group signed a
19
C onference H ighlights deal with Qualcomm Corp to use the latter’s
tool to do it. Data has become crucial.
chips in vehicles and an operating system
The industry is being changed by service-
from Google in vehicles starting 2H2022, as
oriented business models, electrification
reported by MBN.
and the new ownership models. The new focus will be in retention. We must utilize
Volvo is also le a ding th e way in th e
data and bundle our services,” said Cavazos.
transition toward car subscriptions, one of the latest trends regarding vehicle
Technology and personalization are already
ownership according to Forbes. The vehicle
an essential part of vehicles and young
subscription model, similar to subscriptions
people will become the main target, said
offered by streaming applications, offers
Massri. “Affordable cars are important.
consumers vehicles direct from automakers
The growth will be very fast and EVs could
and third-party leasing companies. This
take 50 percent of the market in less than
provides flexible terms and vehicle choices
15 years.”
not of ten found in lease agreements , reported MBN. Subscription models were
While the automotive industry continues
born as a convenient alternative to leasing.
it s a cce l e rate d tra n s fo r m ati o n , d at a
Under this scheme, customers pay an “all-in”
will continue to enable more revenue
monthly fee, which includes vehicle access,
opportunities for OEMs around services and
insurance, maintenance and servicing.
software amid the inflection point Mexico is living in its path to EV adoption, concluded
“We are becoming a consumer-oriented
Kevin Laczkowski, Senior Partner, Global
company. To do so, we must understand
Co-Leader, McKinsey Automotive and
consumers and use every single digital
Assembly Practice.
TRANSFORMING VEHICLE SALES, OWNERSHIP The COVID-19 pandemic transformed the
For star ters , users are not buying as
automotive industry at every level. Among
many vehicles. Rideshare platforms such
the first to be affected were dealerships,
as Uber, Lyf t and DiDi, among others,
as lockdowns shut down show rooms
are transforming public preferences for
and in-person sales for months. Although
commuting. A study of mobility in Mexico
these have since reopened, the temporary
City found that unless its habitants are
shif t of all vehicle sales to the online
traveling over 32 km a day (14 km more
realm transformed the digitalization of
than the daily national average), it is a better
the industry, client expectations and ways
economic decision to use DiDi’s services,
to meet them, as well as vehicle uses and
s a i d R i c h a rd Fa r r, G e n e ra l M a n a g e r,
returns on investment.
DiDi Mexico.
20
C onference H ighlights Furthermore, those who own cars can
have for online purchasing processes. But
find new ways to create revenue through
the source of these demands is no longer
their vehicles, even if they do not want to
a lack of trust, it is an increase of interest.
drive for a ride sharing app. Vehicle owners can rent out their fleets to DiDi drivers for
A study conducted by retail giant Mercado
MX$2,500 (US$124) a week, increasing
Libre found that 20 percent of vehicle
the amount of DiDi vehicles in transit
purchasers are now comfortable buying
throughout the country and allowing the
vehicles through a completely digital
company to meet the growing demand.
process . To help distributors provide
However, for this system to permeate the
these services, Mercado Libre has become
market, financing mentalities and processes
an ally in providing digital add-on tools
have to transform as well.
so they can sell “more and better,” said Iliana Vetrano, Country Head Marketplace,
“One of the main challenges faced in transforming the idea of vehicle purchase into an investment is the lack of financing accessibility that some people face when looking to acquire a car,”
Ve h i c l e s , R e a l E s t a te a n d S e r v i c e s , Mercado Libre. “Today, eight out of 10 Mexicans search for a car on the internet before deciding to buy it. This supports the relevance of
Richard Farr
omnichannel strategies for vehicle sales,”
General Manager | DiDi Mexico
Vetrano said. Mercado Libre even developed a “Universidad Mercado Libre” program in collaboration with AMDA, Go Virtual, Google and other tech giants to better
“One of the main challenges faced in
assist auto distributors through this digital
transforming the idea of vehicle purchase
transformation.
into an investment is the lack of financing accessibility that some people face when
Fernando Enciso, Director, Grupo Surman,
looking to acquire a car,” said Farr.
saw firsthand how the pandemic pushed distributors to adapt to technological
For this, automotive financing services are
innovations in vehicle sales, a move that
also looking to improve the customer’s
had previously been strongly resisted by car
experience. Financers can help users to
salespeople who did not believe sales could
understand the oppor tunity a vehicle
also be made online. Now, “technology and
can bring them not only as a personal
information tools have become part of
investment but also as a medium through
the backbone of the automotive business
which to acquire additional services, said
to facilitate the marketing of vehicles,”
Karla Flores, CCO, LeasePlan. “The process
Enciso said.
of buying a vehicle has to make use of an expert’s experience. LeasePlan provides
T h e p a n d e m i c p u s h e d th e s e c to r to
different solutions so they can support
transform market and customer data into
that process.”
useful information, according to Enciso. Now, real-time market information and maximized
Fleet buyers now look for more information
vehicle data are being used by distributors
online as purchasing processes continue
to help customers make the best possible
b e i n g l e d by a n o m n i c h a n n e l d ig it a l
decision when it comes to acquiring a new
tra nsfo rm atio n . Fo r this , Le ase Pla n’s
vehicle. And just as the pandemic showed
MyFleet platform incorporates different
vehicle owners additional ways to make
s y s te m s t h r o u g h w h i c h d i s t r i b u t i o n
revenue through auto purchasing, it showed
managers can access fleet information
distributors that other opportunities exist
and share it with potential customers,
within client service. The changing usage of
meeting the increasing demands clients
cars for rideshares may reduce ownership
21
C onference H ighlights but it maximizes a fleet’s usage and creates
vehicle in-person, processes are changing
a need for maintenance earlier on.
and adapting to the evolving market. Before, buyers used to visit a car dealership five to
“Buying a car remains a highly emotional
six times before a purchase was finalized.
transaction due to the heavy investment it
Now, it can be made after just two visits.
requires,” said Rubén Hoyo, Country Manager, Autocosmos. Marketplaces such as Mercado
“Digital tools are here to stay and the
Libre and Autocosmos are identif ying
challenge today is that we know people
different areas in which users need assistance
use them, so the next step is to continue
to make an informed decision. Even for
consolidating and create the best relations
customers that continue to prefer buying a
to sell a car,” said Hoyo.
AI, MACHINE LEARNING, CLOUD FOR SMART MANUFACTURING As digitalization increasingly permeates the
“a bsolute ly n e cess a r y ” for inve ntor y
automotive supply chain, cloud services are
control, traceability and the optimization
becoming crucial to the democratization
of operations, he added.
of technology, substantially benefiting manufacturing operations.
Traceability plays an essential role in the automotive industry, according to Syspro.
“The cloud has enabled the democratization
Greater traceability in parts lifecycles and
of artificial intelligence (AI) and machine
supply chains, gives auto manufacturers
learning (ML). Thanks to the power of
the opportunity to mitigate the impact of
computing, I can use these technologies
product returns and recalls. It also allows
eve n f ro m my s m a r tp h o n e . T h e re a l
companies to review existing materials,
challenge no longer lies in receiving
products and processes to reduce the risk of
answers but in knowing how to ask the right
such events to reoccur. While the technology
questions to determine the correct KPIs to
to implement traceability systems, ML and
feed to the algorithms that make up ML and
AI has existed for years, cloud computing
AI. The more accurate the KPIs, the better
opened the door for smaller players to take
answers,” said Miguel Villalpando, Country
advantage of them, agreed experts.
Manager, Vias. “The data generated during manufacturing The strategic impor tance of smar t
processes is relevant but, until very recently,
manufacturing is “undeniable,” according
it was not affordable for many. Storage
to Deloitte. The correct implementation of
capacities are now very affordable and
technology across manufacturing plants
enable users to record data in a well-
brings improvements in costs, throughput,
structured manner and generate backward
q u a l it y, s a f et y a n d reve n u e g row th .
traceability and forward predictability. This
The combined capabilities of industrial
allows degrees of detail never seen before
internet of things (IIoT), cloud computing,
and helps companies to know how to react
robotic process automation, AI and ML,
to circumstances,” said Federico Crespo,
among others, have greatly improved
CEO, Valiot.
manufacturing over the last few years, according to Deloitte.
Cloud computing has enabled players to manage massive amounts of data ,
Despite the proven efficiency of these
said Marcelo Saparrat, CIO, Tecnoap.
technologies, before the pandemic most
This technology enables the creation of
companies “were very hesitant to digitize
sophisticated model ensembles for the
their processes,” said José Rivero, Country
generation of highly sophisticated demand
Manager México, Infor. After the pandemic
prediction models, he added. In addition,
hit, however, digital transformation became
“the sensorization and collection of events
22
C onference H ighlights throughout the supply chain give [the
information is exchanged automatically
model] a multivariable nature and make
between different groups and people. Tier
supply chain management much more
1s, 2s and 3s can be connected to the same
flexible.” Companies have the opportunity to
model and collect information effectively,
act more assertively and make more optimal
without exchanging emails and waiting for
decisions than in traditional scenarios,
a response, he added.
said Saparrat. Big companies are already taking
“It is also about administering scarcity. Under these circumstances, optimizing and managing scarcity has become crucial. Collaboration is also important [and technology] enables companies to connect with suppliers and even end customers to manage the flow in the production chain,”
advantage of the opportunity. Volkswagen, one of the most important employers in Mexico with over 15,000 employees in its two plants, has already started a digital revolution in its plants across the world. The German automaker is investing US$1 billion during the coming years in its three plants in North America to successfully imple m e nt technology such as cloud
José Rivero
software, intelligent robots and AI, which
Country Manager | Infor
require exhaustive training, as reported by MBN. With the unified software launch, Vo lk swa g e n will b e a b l e to o ptim ize collaboration between its plants, upgrade
Demand planning is a cross-functional
the work environment for its employees
p ro c e s s t h a t h e l p s b u s i n e s s e s m e e t
and suppliers and improve the overall
customer demand for produc ts while
manufacturing process.
minimizing excess inventory and avoiding supply chain disruptions, according to
While bigger players continue to take
Netsuite. Demand planning combines sales
advantage of AI, ML and the diverse tools
forecasting, supply chain management
both technologies offer, smaller actors
and inventor y management, and uses
can now benefit from them, thanks to
data from internal and external sources
the democratization of cloud computing,
to predict future demand.
said Rivero. For example, Infor offers CloudSuite Automotive, a system tailored
ML and AI have enabled more assertive
for the industry business processes of
demand planning , said Rivero. These
auto part manufacturers. This solution
to o l s a r e m o r e i m p o r t a n t t h a n eve r
is necessary to build smart, end-to-end
before, he added, due to the situation
value chains “with the greatest possible
that the automotive sector is undergoing
degree of visibility, reliability and agility.
worldwide, with disruptions and shortages
A cloud-based ERP solution can help free
that have impacted production for the past
up capital, while giving you the flexibility
two years. “It is also about administering
to me et your evolving operational
sc a rcit y. U n de r th ese circumsta nces ,
needs,” according to Infor. Tools such as
optimizing and managing scarcity has
CloudSuite Automotive are now available
become crucial. Collaboration is also
for smaller players thanks to the cloud,
i m p o r t a nt [a n d te c h n o l o g y] e n a b l e s
said Rivero.
companies to connect with suppliers and even end customers to manage the flow in
T h e d i g i t a l r evo l u t i o n w i l l c o n t i n u e
the production chain,” said Rivero.
transforming all industries , including the automotive sector, and making jobs
The cloud allows companies to connect
evolve, said Crespo. “Learning human-
interlocutors , said Villalpando, so
machine language since childhood is key.”
23
C onference H ighlights
ROBOTS, COBOTS BENEFIT MANUFACTURERS, END USERS R o b ot s a re i n c re a si n g ly t a k i n g ove r
standard. Safety measures and focuses have
manufacturing processes in the automotive
shifted as cobots require more direct human
industr y, which has gladly welcomed
involvement, but the pandemic proved to
these tools to reduce costs and improve
plants how valuable these machines are
performance. While some fear robots
in adapting to different safety standards.
could replace human labor, these fears are
Many plants used cobots for sanitization or
unfounded, argued industry insiders during
to implement social distance.
the “Robots, Cobots and Manufacturing Automation” panel of Mexico Automotive
Robots and cobots are now being used
Summit 2022.
in final assembly processes thanks to AI and machine learning (ML), which are
When robots were first introduced to
expanding the amount of manufacturing
manufacturing plants in the late 1970s, many
processes these tools are able to improve,
industry workers worried that the robotic
said Burnstein. As with most technological
revolution was starting and would lead to
innovations in the sector, AI was also once
the complete replacement of human labor.
feared despite it simply being machines
Instead, robots have allowed human workers
learning to do their tasks better to improve
to focus on higher-skill tasks by automating
productivity, he explained.
repetitive and low-skill labor. The emergence of cobots, collaborative robots intended
“Automation is enabling people to liberate
for direct human interaction, has further
themselves from repetitive tasks and
changed the relationship between workers
monotonous activities in their working
and robotic innovations as manufacturing
a re a ,” explain e d A b ra h a m S os a , Key
processes continue adopting Industry 4.0
Account Sales Manager, Universal Robots.
principles.
According to Sosa , U niversal Robots is working on designing algorithms for
“The automotive industry has been the
real-time planning so robots can sense if
longtime leader and largest adapter of
something is obstructing their trajectory
robotics,” said Jeff Burnstein, President,
and adjust their movement in changing
Association for Advancing Automation (A3)
environments to prevent production halts.
Mexico. A3 has long battled misconceptions
Solutions such as these will increase in the
regarding robotics, starting with their
short term, which is why Mexico and Latin
safety. The association developed the first
America must invest heavily in automation
American national robot safety standard
technologies to remain globally competitive,
in the 19 8 0s , which then became the
particularly in Mexico’s critical automotive
first implemented national robot safety
manufacturing industry, Sosa explained.
24
C onference H ighlights T h e re is a wi d e a r ray of b e n e fi t s to
machines into plants once they understand
automating processes within automotive
that they are not being used to substitute
m a n u f a c t u r i n g . A l d o L u eva n o , C EO,
humans but to handle mundane and even
Roomie, listed three main ones: cost
dangerous tasks, leaving room for workers
reduction in manual tasks, improvement of
to receive training for higher-skill tasks
current process performances and, most
instead. “Repetitive and dangerous tasks
importantly, the ability to gather data. Real
should be yielded to robots and people
time data of robots’ operations can be used
should focus on tasks that add value to
to improve the decision-making processes
the automation,” Blanc said.
of o rg a nizatio n s a n d m a n uf a c tu re r s . According to Luevano, today’s robots avoid
From a metrology point of view, using
cloud dependency because of machine
robots to detect errors in production
learning. “With machine learning, robots
before costs escalate is just one of the
can change and adapt their behavior,”
many solutions this transformation is
Luevano said.
bringing. ZEISS C arbody Solutions’ Joseph Heizmann and Hubert Waltl found
“Using robots in metrology is enabling systems to detect errors rapidly, allowing for faster solutions and reduced costs,”
th at in cre a sin g inve s tm e nt in ro b ot s and metrology led to more revenue for manufacturing companies. “Using robots in metrology is enabling systems to detect errors rapidly, allowing for faster solutions
Mauricio Rosales
and reduced costs,” said Mauricio Rosales,
Carbody Sales Manager | Zeiss Industrial Metrology
Carbody Sales Manager, Zeiss Industrial Metrology. B u t t h e s e i n n ov a t i o n s a r e n o t o n l y resulting in benefits for manufacturers,
Several other solutions are being rapidly
they also bring improvements for the end
developed to increase efficiency. Robots
customer. According to Felipe Rivera,
and cobots can increase operation
M a n a g i n g D i re c to r M exico a n d L ati n
efficiency by 20 -23 percent, inventory
America Mitsubishi Electric, automation
control qualit y by 4 8 percent and
enables the automotive industry to reduce
productivity by 40 percent, according to
the energy it uses. This leads to more
Mauricio Blanc, Senior Director Customer
sustainable processes, a growing demand
Ser vices and Senior Direc tor M exico,
by consumers. Furthermore, by increasing
Omron Americas and Omron Automation.
manufac turing efficiency, automation
However, there are still challenges such as
results in safer vehicles being sold to the
the rising threat of cybersecurity and that
market and a minimized margin of error in
50-60 percent of today’s robots are not
the vehicles humans drive.
connected. “Automation is leading societies to more According to Blanc, worker unions have
sustainable and happier lifestyles ,”
reacted positively to the addition of robotic
Rivera said.
THE FOUR PILLARS OF SUSTAINABLE MOBILITY Sustainable mobility is one of the many
“Sustainability is not a technology with
ways to support decarbonization goals.
which the car moves; it is a 360° execution
However, simply focusing on improving
that considers product design, production,
the vehicle’s engine limits companies from
materials, operation and what happens to
truly embracing sustainability.
the materials afterwards,” said Juan de Dios
25
C onference H ighlights Gómez, Director General, Irizar Mexico.
the life of batteries and not cause emission
Present in over 15 countries, Irizar Group is
problems in the environment,” says Gómez.
composed of seven companies focused on mobility and sustainable mobility. In 2017,
In ICE vehicles, the use of biofuels is also
Irizar inaugurated its e-mobility factory,
another alternative to increase sustainability.
which was the first plant in the EU to be
These fuels can reduce emission by up to 85
dedicated exclusively to electromobility.
percent because they use biological waste,
Irizar began operating 23 years ago in
said Gómez.
Mexico with the group’s second largest production plant, where it has manufactured
In the future, automotive companies also
over 14,700 units.
hope to exploit the benefits of hydrogen to contribute to a sustainable mobility. For
“Sustainability is not a technology with which the car moves; it is a 360° execution that considers product design, production, materials, operation and what happens to the materials afterwards,”
Juan de Dios Gómez
example, Irizar is working on a project to use hydrogen as a fuel, said Gómez. Production changes can significantly improve sustainability through the smart use of energy at manufacturing plans. “Manufacturers can also use ecological silicone or adhesive to reduce their carbon footprint,” said Gómez.
Director General Mexico | Irizar
Finally, concerning operations, Irizar has implemented tech to monitor operations and optimize the use of buses. While 99 There are several ways to improve a
percent of Mexico’s buses are powered by
vehicle’s sustainability, all of which with
diesel, technology can predict if drivers are
benefits and drawbacks. Gómez shares that
needlessly wasting fuel by accelerating or
there are four pillars to transform mobility:
stopping frequently or abruptly.
design, materials, design, production and operations.
On their own, these actions contribute to sustainability but a combination of different
In buses, sustainability often focuses on
measures may allow companies to greatly
reducing emissions but it can be improved
step up their efforts. Moreover, the World
through an aerodynamic, light design and a
Bank recommends that while all partners
closed lifecycle that gives the manufacturing
have unique expertise and perspective,
materials an afterlife, said Gómez.
companies should work together to change transport for the better. “Stakeholders
Regarding materials, an EV’s battery has a
can work together to shape the future of
limited lifetime but what happens to them
mobility, while also ensuring that all of the
afterwards is not well documented, leading
SDGs (sustainable development goals)
companies such as Irizar to try to extend
move in the direction of ending poverty
the battery’s life cycle. “Irizar is currently
and building shared prosperity,” said the
working on a project with Repsol to extend
World Bank.
MATERIAL TECHNOLOGY IS CRUCIAL FOR INDUSTRY TRANSFORMATION The automotive industry’s adoption of
cleaner fuels, agreed industry experts.
e-mobility and sustainability will only be
“ The industr y must aim for a holistic
possible through constant innovation
approach , paying attention to all the
in lightweight materials, copper alloys,
different aspects of car manufacturing,
high-performance polymers and
from gasoline savings, advanced engine
26
C onference H ighlights
lubricants and green tires to coatings
and EVs 83 kg, he added. “EVs require a
and other parts. Reducing weight while
lot of copper. So far, it is used in motors,
improving design is the challenge. We
batteries , inver ters , wiring and fuses .
try to understand the market’s needs by
In addition, it is also important for EV
listening closely to customers,” said Martín
infrastructure, such as chargers, wires
Toscano, President, Evonik Industries
for distribution , electrical panels and
de México.
charging cables.”
The automotive industry is experiencing
EVs require new copper alloys composed
transformative changes due to connectivity
of “more specific materials, not the regular
advances, automation, data analysis and
copper we used to have in the past,” said
the rise of new mobility services. Materials
Guzmán. Today’s copper requires higher
are the core competence of the automotive
current resistance, while mechanically
manufacturing industry, according to the
holding the form. By 2027, the demand
Center of Automotive Research (CAR): “No
for copper will reach 1.74 million tons each
matter how high-tech the final product is—
year, he added. “It is an entire material
production always starts with basic raw
revolution. Copper is the new gold.”
materials.” Although the industry is shifting toward Over the past 10 0 years, the industr y
EVs, the transition still requires time and
has produced vehicle bodies en masse,
lightweighting has played an important
most of them made predominantly
role to increase vehicle efficiency and
from steel. Currently, manufacturers are
p e r fo rm a n ce . Th e se t wo to pic s h ave
experimenting with alternative materials
been discussed for decades but are now
such as aluminum, magnesium, plastics
paired with the concept of sustainability,
and polymer composites. According to
highlighted Vishwas Shankar, Director,
CAR, the average vehicle body in the US
Frost & Sullivan. In 2018, the average car
fleet today is 65 percent steel, 13 percent
weighed 1.85 tons, of which 55 percent
aluminum, 4 percent magnesium, 6 percent
was cast iron and steel, 11 percent plastic,
plastic and polymer composites and a
9 percent aluminum alloys , 7 percent
variable percentage of glass, adhesives,
rubber, 3 percent glass, 1 percent non-
sealers and foam.
ferrous alloys and 14 percent represents other materials, reported MBN.
Copper is one of the materials that will grow in demand in the near future, said
Chemic al giant s such as Evonik have
Saulo Guzmán, General Manager, Wieland
continuously supported OEMs and Tier
Group. ICE vehicles usually incorporate
1 s ’ lig ht we ig htin g g o a ls . “ W ith in o u r
about 21.8 kg of copper, HEVs 39.9 kg
company, we are always looking for more
27
C onference H ighlights sustainable and lightweight materials.
Heavy Vehicle Lightweighting
We work closely and listen to our clients,” said Toscano.
The heav y vehicle industr y has been exploring lightweight materials for years,
I n n ov a ti o n , a d v a n c e d m a te r i a l s a n d
especially for the bus and coach sectors.
nanotechnology are vital to move the
Elec trific ation is not penetrating the
industry forward, said Alex Elías Zúñiga,
coach sector at the same rate as the urban
Re se a rch G ro u p Le a d e r of N a n ote ch
segment due to weight, said Juan de Dios
and Device Designing, Tec de Monterrey.
Gómez, Director General, Irizar México.
Academia is driving research, playing an important role in the industry
“It is all about weight. How to demand less
transformation and must be partnered
capacity per hour for batteries. We thought
with industry and government to take
about the all materials. [Using] aluminum
the result s from lab sc ale to mass
to replace steel, reducing thickness of the
production, he added.
system with a more robust but less heavy body. We have also replaced the wood used
“Tec de Monterrey launched the Institute
in bus floors with polymers,” said Gómez.
of Advanced Materials for Sustainable Manufacturing, where advanced materials
The automotive industry of the present
are discovered, designed, manufactured,
and future will continue to rely on material
c e r t i fi e d a n d s c a l e d u p f r o m l a b to
technology. For that reason, the sector
m a s s p ro d u c ti o n , a i m i n g to d eve l o p
requires a holistic approach to understand
lightweighting components for both the
the needs of ICE vehicles and EVs, taking into
automotive and aerospace industries to
account that copper will play an increasingly
produce less CO2 emissions,” said Zúñiga.
relevant role, concluded Shankar.
FUTURE VEHICLES MAY BE 3D PRINTED O riginally used only for protot yping ,
Director General and Co-Founder, Tridi. The
additive manufacturing is now disrupting
automotive and aerospace industries have
the automotive value chain and finding its
been the biggest adopters of 3D printing
way into more industrial processes. As the
but the way the automotive sector uses this
supply chain continues to face disruptions,
technology is changing.
additive manufacturing is an easy-to-use industrial tool through which productive
I n th e a uto m otive i n d u s tr y, a d d itive
processes can be maintained.
manufacturing was initially used solely in prototyping processes, explained Fadi
Additive manufacturing, also known as
Abro, Director of Automotive Business,
3D printing, can now be used in numerous
Stratasys. “Prototypes are low-volume,
processes of the automotive manufacturing
h i g h -v a l u e c o m p o n e n t s , m a k i n g 3 D
chain , according to Sebastián Romo,
printing the optimal tool [to manufacture them],” said Abro. Stratasys invented one of the first major additive manufacturing
“During the struggle with longer delivery
technologies in the 1980s, which has been
times due to the pandemic, additive
used in many different industries since. As
manufacturing helped the industry
printing technologies evolved, they led to
dramatically reduce the delivery time of
the manufacture of better products and
auto parts,”
Octavio Pichardo Additive Manufacturing Manager | General Motors
opened up additional areas of value. 3D printing can now be used to manufacture auto parts, which is changing automotive value chains . Additive manufacturing
28
C onference H ighlights provides two advantages to automotive
technique in mind, instead of trying to
manufacturing: faster market delivery and
i n co rp o rate this process into already
higher fidelity.
operating production lines.
Another way to generate value through
Automotive companies are recognizing the
additive manufacturing is tooling. “Tooling
increasing value of shifting gears towards
is the second largest application field [for
additive manufacturing. According to
3D printing] in the automotive industry
Abro, there is currently an open market for
because it is a very simple way to obtain
whichever automotive brand will be the
fixtures that raise capabilities in terms
first to develop a completely 3D-printed
of assembly,” said Leopoldo Ruiz, Head
vehicle, which will then have the largest
of the National Laboratory of Additive
customer loyalty.
Manufacturing, UNAM. Tooling can support manufacture through the production of
One competitor making great progress in
high-value, low-volume tools, which can
additive manufacturing implementation
also be produced faster and with better
is General Motors (GM), which is also
materials.
one of the largest early adopters of this technology. The automotive company
The main challenge for additive
used additive manufacturing to solve
manufacturing is using it in the production
problems in manufacturing lines to keep its
of end-use parts, a method that is
equipment running.
gradually gaining popularity. According to A b ro, a d ditive m a n uf a c tu rin g c a n
However, the true value of this technology
produce anything a manufacturer may
was only understood during the pandemic,
want but that does not mean that using
according to Octavio Pichardo, Additive
this m eth o d m a kes se n se fi n a n cia lly.
Manufacturing Manager, GM. “During the
Additive manufacturing is better applied
struggle with longer delivery times due
in the production of a short run of time
to the pandemic, additive manufacturing
sensitive end-use parts, instead of larger
helped the industry dramatically reduce the
volumes. But manufacturing plants are
delivery time of auto parts,” said Pichardo.
relying on additive manufacturing for the provision of spare parts to become less
While overseas OEMs were unable to
supplier dependent.
deliver supplies for up to 30 days, additive manufacturing was able to provide solutions
According to Ruiz, additive manufacturing’s
in one to two days. This was a game changer
benefits will be maximized when auto
for GM, Pichardo explained. Because of
parts are designed with this production
this, the company is expanding its additive
29
C onference H ighlights manufacturing reliance and investment.
Additive manufacturing has a promising
Pichardo sees two main points for the
short-term future, as more and more 3D
future use of this technology. First, future
printers will begin showing up across
generations of designers and engineers
automotive manufacturing plants. But
will enter the industry with an additive-
i t s l o n g -te r m a p p l i c a ti o n s c o u l d b e
manufacturing mindset, boosting the talent
game changing.
behind innovations in the area. Second, the industry will gradually start embracing these technologies.
LEADERSHIP, ENGAGEMENT BOOST COMPANY DEVELOPMENT Employee engagement has become an
Companies’ priorities of ten center on
essential tool for organizations striving
pleasing clients “without realizing that
to i n c re a s e p ro d u c ti v it y, i m p l e m e n t
employees are part of their client base just
innovative business strategies and
as much as clients, shareholders and the
improve performance. The latter is making
overall community,” said Rodríguez. As
companies move away from being solemnly
a result, employees need to be provided
capital focused and begin integrating
with a sensorial experience through social,
employees’ development as part of their
workplace and organizational encounters.
business strategy. In his experience on employment Employee engagement can be critical to
development, there are four fundamental
a company’s success, given its clear links
pillars to have involved employees:
to job satisfaction and employee morale. Communication is a critical part of creating
1.
Development of the entrepreneur in every employee so they feel empowered in their job.
2.
Leadership training because effective leaders are able to influence their followers to achieve the organization’s goals, produce change and motivate employees.
3.
Family integration is key to help employees find a satisfactory work-life balance, reducing stress and fomenting happiness.
4.
Resilience during challenging times will also help employees to face uncertainty.
and maintaining employee engagement. Engaged employees are more likely to be productive, higher performing and display a greater commitment to a company’s values and goals, explained Investopedia.
“During the struggle with longer delivery times due to the pandemic, additive manufacturing helped the industry dramatically reduce the delivery time of auto parts,”
Training is one of the most fundamental factors in a company’s value proposition,
Mario Rodríguez
said Rodríguez. “Employees have to be
Former CEO | Arbomexw
trained on activities that create savings and revenue for the company and for themselves. Furthermore, they could also greatly benefit from encouraging their
D espite th e b e n e fit s , “ 8 5 p e rce nt of
creativity and inspiration, and by having a
employees in Mexico are not engaged in
business mindset within the family. That way
the workplace,” explained Mario Rodríguez,
they can create their own capital.”
Former CEO, Arbomex. Furthermore, 73 percent of workers are looking for a job
Th e se cret mix for a com pa ny to b e
that challenges them and 69 percent of
successful, according to Rodríguez, is to
employees feel unappreciated at work, said
promote engagement, create happiness,
Rodríguez.
foment trust and teamwork and train
30
C onference H ighlights leadership. Emotional salaries are also
to the value proposition. “Knowing how to
f u n d a m e nta l , h e a d d e d , hig h lig hting
manage talent to increase engagement is a
those activities such as reading, camping,
skill that human resource professionals are
dancing, theater, swimming, and quality
encouraging among leaders at all levels,”
time with peers, partners and family add
said Rodríguez.
SUPPLY CHAIN STILL RECOVERING AMID TRANSFORMATION The automotive supply chain has suffered
already expected that the demand for
major disruptions, shortages, cost increases
chips would be 10 percent greater than the
and logistics troubles over the past two
supply, said Karen Lellouche, Managing
years. However, while a full recovery is
Director & Partner, BCG. “Semiconductors
not expected in 2022, the challenging
were already an important problem. In
environment that the auto value chain
2021, almost 8 million vehicles could not be
faces has also opened several opportunities,
manufactured due to chip shortages.”
agreed industry experts. Semiconductor shortages still plague the “We are facing an uncertain future but
automotive industry, with OEMs constantly
within the uncertainty there are some
stopping production across the world. In
opportunities. In 2019, we expected a
Mexico, the situation has not been different;
trend toward nearshoring even before the
production and sales figures have hit their
pandemic hit… About 15-20 percent of the
lowest levels in the last decade, while
US$1.7-trillion global automotive industry
exports have not recovered entirely from
was expected to be regionalized, opening
the pandemic crisis, as reported by MBN.
opportunities to capitalize on that trend,” said Miguel Alcaraz, Partner, McKinsey &
The semiconductor issue goes beyond
Company Operations Practice Leader.
the pandemic and is a structural problem, said Carlos Zegarra, Partner at Mexico
The automotive sector is experiencing one
Management Consulting Leader, P wC
of the largest transformations in its history
Advisory. “COVID-19 only intensified the
as it faces several challenges triggered
impact of semiconductor shortages. It was
by the pandemic, such as the high costs
already a problem, with 70-80 percent of
of sea freight and raw materials and the
the total supply concentrated only in two
semiconductor shortage, said Alberto
countries.”
Bustamante, General Manager, INA. Taiwanese semiconductor manufacturers The crisis began with semiconductors.
lead the semiconductor market,
Although the pandemic worsened the
representing 65 percent of global revenues.
problem, Boston Consulting Group (BCG)
Taiwan Semiconductor Manufacturing
31
C onference H ighlights Company (TSMC) stands above the rest,
also produces nickel, which is important for
with 56 percent of the global revenue and
EVs, and palladium and platinum, used in
a market cap of around US$550 billion,
ICE vehicles, she added. Russia produces
ranking it as the world’s 11th most valuable
about 30 percent of the world’s palladium,
company, according to The Wall Street
according to Mining.com.
Journal. This position led the publication to refer to the world’s dependency on TSMC
With all the difficulties that the industry
as a vulnerability. Semiconductors have also
has faced, suppliers have still “pulled-out
been a focal point of tensions between the
miracles” to meet requirements, said Manuel
US and China, as Taiwan claims the industry
Montoya, President, Automotive Cluster
“as its own,” according to the newspaper.
Network. “In 2021 production was lower than in 2020 and the negative effect works as a
During 2021, the US and the EU addressed
chain: when OEMs stop productions, Tier 1s
the shortage by creating several initiatives
stop productions then Tier 2s. We still hope
to attract investment and produce their
that components will do better in 2022.”
own chips. The US’s aggressive bill to foster semiconductor development within its
Day-to-day management and long-term
borders represents another opportunity for
leadership became crucial during these
Mexico, said Bustamante. “Our country has
d i ffi c u l t ti m e s , s a i d M a r tí n To s c a n o ,
volunteered to program the semiconductors
President, Evonik Industries de Mexico.
that will be manufactured in the US. We have
Major international players leveraged their
two capable plants, in Jalisco and Mexicali.”
global footprint to mitigate the impact of the crisis, taking advantage of their network
The situation remains complicated for
and most important assets, he added.
2022, which will be another challenging year, said Alberto Torrijos, Automotive
The automotive supply chain will continue
Sector Leader Partner, Deloitte. The Russia-
its transformation as the industry itself
Ukraine conflict is also increasing the price
does. “We are going toward a supply chain
of oil, gas and commodities, and generating
relocation and nearshoring,” said Toscano.
uncertainty and loss of confidence, he added. “It is a challenging year but it can
Although some talk about returning to
also be the launch pad for a better 2023 or
normal and a full recovery, many of the
2024,” said Torrijos.
changes that the pandemic brought will stay forever, said Francisco Bautista, Partner,
The Russia-Ukraine conflict has impacted
Advance Manufacturing and Mobility Leader
all industries across the world and also
LATAM North, EY. “The supply chain has
laid a direct hit to the automotive sector,
moved to a circular economy. The linear
said Lellouche: “Ukraine is one of the main
chain is already obsolete. Suppliers must
producers of neon gas, which is crucial for
design their products to adapt to this new,
semiconductor manufacturing.” The region
sustainable business model.”
THE TIME TO MANUFACTURE IN MEXICO IS NOW Mexico has long stood as the manufacturing
However, the endless opportunities in the
ground for international countries looking
industry do not make the landing process
to make use of bountiful resources, a
any less complicated.
convenient location and an ample source of talent. As Latin America’s main exporter of
Despite Mexico having an offering of
medium and high technology, according to
around 550 industrial parks, according
Claudia Estevez, Executive Director, AMPIP,
to Estevez, real estate for manufacturing
many companies are looking to enter
companies in the country is becoming
the territory to expand their operations.
harder and harder to secure due to the
32
C onference H ighlights high demand, said Salomón Noble, General
is as challenging as any other country where
Director, Intermex, a company focused on
a company is not yet present. Our key value
facilitating successful establishment of
is that we are not experienced in automotive
operations in Mexico through real estate
or textile industries; our experience is in
and administrative services. Companies are
working in Mexico,” said Russell. “Our clients
looking for buildings they need as early as
are focused on delivering their products
the next day and cannot afford to wait seven
on time. Everything else happening in the
to nine months for an alternative to be built.
background is our responsibility.”
Partners like Intermex can offer support in this area, as well as in finding the right talent
Another hurdle faced by companies is
for companies, translating their needs to the
the challenge of forming longstanding
Mexican environment.
relationships with the government due to the limited time administrations may
Shelter services help to define the right
have in office. “Companies have to keep
c a n d i d a te p r o fi l e f o r t h e c o m p a ny,
in mind whether a local government is
preselecting them to fast-track the process.
starting or ending its administration, as
“Job descriptions are key in this process.
that impacts the possibility for long-term
These need to be tropicalized to the
relations ,” said Eduardo Infante, Vice
Mexican reality so the right person can be
President, Aguascalientes Industrial Cluster,
found at the right cost,” said Noble. Once
and Deputy Minister of Investment for
the candidates are pre-selected, preference
Economic Development, State Government
is given to those closer to the manufacturing
of Aguascalientes. Having a partner like
site to reduce transportation costs and the
a shelter ser vice company c an be of
company’s overall environmental impact.
great use in these situations, according
“This also leads to a reduced turnover,”
to Infante, as these companies are in
said Noble.
charge of building relationships with each administration, taking that burden away
“The global realignment is creating the greatest opportunity for Mexico in history. Mexico is the darling of the manufacturing industry and we just need to seize the opportunities”
from manufacturers. This does not mean that different political parties are not willing to work together for the sake of expanding business in the country, however. “The role of the
Alan Rusell
public sector is key in attracting further
President and CEO | Tecma
investment,” said Infante. Aguascalientes, along with nine other state states governed by the opposition, have worked together to replicate the promotion efforts of bodies like
According to Alan Russell, President and
ProMéxico, trying to replicate the success of
CEO, Tecma Group, the environment in
the Bajio area as an investment destination.
Mexico is ever-changing and has never
“We realized that collaboration was missing,
been more challenging than it is today.
which is why we worked on the Invest in Mx
There is an exhausting process behind
initiative to highlight our similarities and
operation certification, making it imperative
boost the country’s competitiveness.”
that companies get help to participate in this environment, particularly as Mexico’s
Logistics solutions are also an imperative
manufacturing opportunities are at one
aspect of international manufacturing.
of their best moments after the signing
Unfortunately, while the pandemic brought
of USMCA . Having the right partner is
countless opportunities to the e-commerce
key for companies to be able to ramp up
world, it has brought significant challenges
their operations without worrying about
to international shipping. From COVID-19
peripherals. “Mexico’s manufacturing scene
variant lockdowns to the congestion of
33
C onference H ighlights Asian ports and the impact of the Russian
T h e r e a r e s t i l l c h a l l e n g e s to t a c k l e
invasion of Ukraine, logistics partners are
in the form of infrastruc ture, as well,
seeing a wide array of challenges to solve.
particularly as demand increases. Vacancy
According to Victor Benavidez, Country
is worrying in some areas like the Bajio
Manager, TIBA, the pandemic transformed
and industrial zones at the Mexico-US
the role of logistics partners, from service
border like Juarez, according to Noble.
providers to actors with a strategic role in
Infante highlights the lack of water and
the establishment of business strategies.
energy availability in certain areas as a
While companies may already have relations
hurdle that could potentially hinder the
with global logistics providers, having a
industrial sector’s success. “ We are at
local partner that knows the intricacies of
risk of losing investments earmarked for
the country can be crucial to ensure quality
Mexico should we not be able to meet this
and efficiency in operations. “Efficiency
demand,” he said. Most recently, López
and reliability are key elements in today’s
Obrador’s energy reform has become a
business. Building these relationships
new roadblock to the industry. Uncertainty
with l o c a l p rovi d e r s c a n b e a n oth e r
remains while the bill gets voted and
advantage offered by shelter-like services,”
there are lingering issues regarding CFE’s
said Benavidez. “This local experience
transmission capabilities. “Generation is
and interaction can bring quick wins to
not the issue as there is currently more
the company.”
supply tha n de ma nd . Th e proble m is carrying that supply to where it is needed
“Mexico has a great reputation, from a
and resources are being alloc ated to
legal framework perspective, regarding
other project instead of addressing these
the automotive industry. There has never
issues,” said Noble.
been a better time than now for companies to come and establish here,” Russell said.
Yet, panelists do not see it passing due
Through contractual arrangements typically
to t h e d i r e c t o p p o s i t i o n to U S M C A
with a shelter company, international clients
commitments and for leaders like Russell,
usually do not even need to have presence in
the future looks promising. “The global
Mexico to have a successful manufacturing
re a lig n m e nt is c re ati n g th e g re ate s t
operation. “Reputation conquers all and
opportunity for Mexico in history. Mexico
the Mexican government has a reputation
is the darling of the manufacturing
of supporting business. Today is Mexico’s
industry and we just need to seize the
day,” said Russell.
opportunities,” said Russell.
www.mexicobusiness.mx