37 minute read
Automotive
Ricardo Moguel
Country Manager of Doctoralia
Telemedicine Gains Ground in Mexico
Q: Previously, you have mentioned that 40 percent of users preferred face-to-face consultations. How has this changed following the pandemic?
A: The number of virtual consultations is rising. From April 2020, which is when we initiated online appointments, to January 2021, we registered more than 3 million appointments. Today, people are in the early stage of starting to consume healthcare online, building word of mouth. Also, people see that these consultations are 20 percent more economical, which contributes to their mass adoption. When people realize the advantages and benefits of using the service, they continue using it. Every month, about 4.5 million people book an appointment and they return for another one.
Q: How have Doctoralia’s services changed to better address the needs of patients during the pandemic?
A: Regarding consultations, we were focusing on our video quality so that it requires very little bandwidth to reproduce a goodquality image. Doctors said, however, that it is key to be able to send prescriptions, otherwise patients cannot purchase their medications. We moved away from video improvements and focused on prescriptions, which has been a great success. Doctors also asked that they be able to share their screen, so we developed this feature that allows them to share videos and figures with the patient. We also developed a record-taking function so the doctor can take notes about the patient. After implementing these three changes, the level of usability increased and more users joined. We now have over 10,000 doctors in Mexico from more than 70 different specialties.
Q: What barriers are preventing the broader adoption of telemedicine?
A: The patients themselves are among the barriers because they continue to think that they need to see the doctor face to face or they will not be cured. However, there is a great deal of data that suggests that a visit to the doctor is not always necessary. Telemedicine not only optimizes consultation time but also reduces costs and minimizes the possibility of exposure to infection. In addition, it widens the scope of services, as doctors can reach remote locations while patients have access to more specialists. Due to the issue of mistrust, we validate all doctors’ credentials through a third party that certifies their identity.
We need to do a great deal of work on public policy to regulate the use of electronic prescriptions in Mexico, allowing, for example, electronic prescriptions for controlled drugs. There are other countries where online consultations are reimbursed to patients or where the first point of contact is through a digital consultation that results in a first diagnosis. In Mexico, this is not the case yet. Once telemedicine is seen as a valid and regulated option, within a year we might experience a boom as an organization. At the end of the day, it is the patient who wins, which is what we are looking for.
Q: How does Doctoralia handle data protection of its patients and doctors?
A: As part of a European company, we need to comply with strict data protection guidelines. We use servers in the US and we have many security filters when hiring new partners. Security
has always been a priority for Doctoralia. We do not use patients’ data at any time. Our contracts are exclusive with doctors and we provide them with the tools to store the information. So far, we have not had any issues.
Q: What benefits does Docplanner Group offer to doctors?
A: We are passionate about changing the world and we really want to bring healthcare to more people. Today, we are the largest group in the world in terms of digital health. We have more than 2 million health specialists working with us and this month we exceeded 50 million users looking for a doctor.
We have been operating for three years and in that time, the company has built a team of about 300 people only in Mexico. It would take years for doctors to develop all the tools that we already have. There are 300 developers working with Doctoralia and thinking every day about how we can provide doctors with better tools to make them much more efficient. We have even invested in an artificial intelligence company because we want to help doctors make faster diagnoses and pre-diagnoses. Doctors can be certain that with Doctoralia, they will have access to cutting-edge technology at a very low price.
Q: What are Doctoralia’s goals to expand to other countries?
A: We are satisfied with our current operations and we do not plan to expand at the moment. There is still so much to do in the market. We still see limited penetration in terms of what we could do, particularly in Mexico. We have opened operations in other countries in Latin America and understanding how health models work in each of these countries has been a challenge.
Q: How important is a doctor’s online reputation, today?
A: That is something to which we pay a great deal of attention. We screen all comments and the line is very thin between an acceptable and an unacceptable comment. We do not tolerate insults toward doctors on our portal, nor do we accept when patients question certain things about a doctor’s practice because we are neither a judge nor a medical institution that can determine whether he is right or not, so we do not publish those comments. However, we do publish comments that have to do with the doctor being late or prescribing a drug without explaining what it does, for example. An online reputation is everything for a doctor. A doctor with more than 10 favorable ratings has three times more opportunities to attract new patients than a doctor who has none.
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9Automotive
Last year brought unprecedented challenges to the automotive sector at the global, regional and national level. Suppliers were forced to embrace a digital world, while sales, production and customer relationships were changed permanently following a global manufacturing shutdown.
Industry leaders have called 2020 “a turning point” for the industry. The light-vehicle sector experienced an annual drop in production, exports and sales against 2019 — falling 20.2, 21 and 28 percent, respectively. The heavy-vehicle segment also posted negative numbers, with drops of 32.3 percent in production, 31.4 percent in exports and 38 percent in sales. Despite all this, the sector remains at the cornerstone of the Mexican economy, representing 3.8 percent of GDP, 20.5 percent of the manufacturing GDP and approximately 1.9 million direct jobs.
The pandemic accelerated industry trends. CASE vehicles are influencing suppliers’ operations across the country. Connected vehicles are enabling new monitoring and safety features. Autonomous vehicles continue to challenge existing infrastructure. Shared mobility is forcing OEMs to innovate to maintain sales levels. Electric vehicles are also becoming a central element in OEMs’ strategies thus influencing the entire supply chain. In Mexico, automotive clusters in each region are focusing on their individual strengths to become specialized hubs to better attend OEM requirements.
9Automotive
158 Analysis
Aftermath of a Historic Year
159 Conference Highlights
Disruption Spurs Mobility Transformation
160 View From the Top
José Zozaya | President of AMIA
161 Conference Highlights
Toyota Leading the Industry’s Transformation
162 View From the Top
Felipe Villareal | CEO of Alian Plastics
163 View From the Top
Martin Toscano President and General Manager of Evonik
165 Analysis
Mexican Automotive Industry: SWOT Analysis
166 View From the Top
Lourdes Cobos | Operations Manager of Yanfeng Automotive Interiors México
167 View From the Top
Ignacio Moreno | CEO of Bocar Group
168 Roundtable
What Should Companies Do to Embrace Industry 4.0?
169 View From the Top
Miguel Barbeyto | CEO of Mazda de México
171 Expert Contributor
Guillermo Prieto | President of AMDA
172 Content Links
Aftermath of a Historic Year
Industry leaders remain optimistic about the role Mexico will play as a world-class automotive hub. Although auto parts and vehicle production took a hit due to the pandemic and recent semiconductor and natural gas shortages, USMCA is consolidating nearshoring trends in a region where global players from Asia to Europe are setting a strong manufacturing footprint. “Today, we are at a turning point. However, we are pushing to carry on with the commitments we have made so far,” said Fausto Cuevas, Director General of AMIA.
Light Vehicles Light-vehicle production remains the cornerstone of the Mexican automotive industry. Over the last 10 years, OEMs ramped up vehicle production mostly to supply the North American market. Kia, Toyota, Audi, Mazda, BMW, JAC and Stellantis — after the merger of FCA and the PSA Groupe — have arrived with a long line of suppliers behind them. Today, 14 companies report production numbers to INEGI and AMIA.
Electrification and Green Vehicles As OEMs work decisively toward achieving carbon neutrality, green vehicles are increasingly becoming part of their portfolio. Electric, plug-in hybrid and hybrid light vehicles have consistently increased their share in Mexico’s sales, going from 0.5 percent in 2016 to above 2.5 percent in 2020. Despite the pandemic, plug-in hybrids and EV sales have increased year-on-year, uninterruptedly. As for commercial vehicles, only a few companies produce natural gas, gasoline and electric trucks and buses in the country and 98 percent of these go to the US market. Just two brands are betting on natural gas and hybrid vehicles for the domestic market, which represented 7.6 percent of total commercial vehicle imports in 2020.
Supply Chain Evolution Last year, supply chains were forced to demonstrate resilience and adaptability to avoid disruption, securing inventory and guaranteeing logistics continuity. “2020 was a historic year when everyone was forced to innovate,” said Antonio López, President of ARIDRA. The Mexican automotive sector was dependent on Chinese and Southeast Asian imports for specific components, mainly tooling and plastics. With the fragility of global supply chains exposed, industry leaders agreed the pandemic accelerated a trend toward regionalization. Nearshoring is the buzzword to define relocating production operations closer to where consumer markets are.
The challenge to balance the economic impact and virus outbreaks forced governments to end lockdowns and companies to operate under strict health standards. Companies implemented social distancing measures and consequently accelerated the implementation of smart manufacturing strategies. Meanwhile, at the global level, automakers announced unprecedented commitments toward carbon neutrality that will also drive suppliers to meet more thorough environmental standards. In short, the sector is witnessing the forging of a safer, smarter and more sustainable supply chain. “We were proactive in the most challenging situation the automotive market has faced in more than 80 years,” said Guillermo Rosales, Director General of AMDA.
Disruption Spurs Mobility Transformation
Mobility companies have had to get creative regarding their product portfolio, while providing safer services for their users. “This year brought significant opportunities to innovate,” said Juan Andrés Panamá, CEO of Mexico and Argentina at
DiDi, during Mexico Automotive Summit on Thursday, Mar. 25.
The world changed during 2020. “In Latin America we thought that we had seen everything. We were wrong,” said Raymundo Cavazos, CEO of Volvo Car México. In its early days, the pandemic brought Mexico to a near standstill as many began to work from home, non-essential businesses closed and people started to avoid leaving their homes to buy food and other necessities out of fear of coming in contact with the virus. This meant a sharp reduction in mobility services. “Demand plummeted last year. In March and April, it fell by 50 percent,” said Panamá.
Traffic, one of the main annoyances of daily commuters, was also down. However, traffic is gradually coming back as lockdowns ease and vaccination programs advance. “Although there is less traffic now, do not be fooled. Traffic will return,” said Anasofía Sánchez, Director General at Waze LATAM. She reports that in 2020, Waze saw an 80 percent mobility drop in Mexico City. However, it is slowly picking back up. “To this date we have seen an 80 percent recovery in traffic from its lowest point and we estimate that we are still 20 percent below pre-pandemic levels,” she said. Moreover, lockdowns seen in December did not hit mobility as hard as those in March 2020, Sánchez added.
While the world might slowly be going back to normal, the changes the pandemic brought are here to stay. One of these is the reevaluation of car ownership as consumers balance mobility as a service with an increased feeling of safety in their own vehicle. Traditionally, Mexican culture has favored car ownership. “We are one of the countries with less financial incentives for buying new cars but there is significant interest from the general public in acquiring one,” said Sanchez. Before the pandemic, however, mobility apps led younger generations to question whether they truly needed a car of their own. “Ownership relevance is changing as Mexicans are now realizing they just need the service,” argued Cavazos. However, car ownership came into the spotlight again as users of public transportation or mobility apps questioned the safety of those services. “Cars are taking a new role during the pandemic as they give an unrivaled sense of security against other mobility options,” said Sánchez.
Raymundo Cavazos
CEO of Volvo Car México
Juan Andrés Panamá
CEO of Mexico and Argentina at DiDi
Anasofía Sánchez
Director General at Waze LATAM
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José Zozaya
President of AMIA
We Need to Take Care of Existing Investments
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More about this person Q: How would you evaluate the state of the automotive industry in the country?
A: It has been a difficult time for the automotive industry in Mexico due to the COVID-19 pandemic. The sector stopped production and new vehicle sales for over two months. The pandemic also translated to a drop in light-vehicle exports and new vehicle sales of 20 percent and 28 percent, respectively. However, we saw a slight recovery when plants and floor sales opened again in 2H20. At the same time, the increase in demand for semiconductors has affected both production plants and the supply chain due to the role they play in ADAS and other vehicle systems. As part of a perfect storm, the cold wave that hit Texas affected natural gas production and exports. Although brief, the shortage of natural gas forced a technical halt at some facilities in February.
That being said, the relationship between Mexico and North America in the automotive industry is essential. The US still demands Mexican vehicles, particularly SUVs and pickups. Mexico is the world’s fourth-largest vehicle exporter and the sixth-largest vehicle producer. More than 80 percent of our exports go to the US and Canada, while the rest go to Europe, Asia and Latin America. The automotive sector generates more than 1 million direct, well-paid jobs and contributes to 3.8 percent of Mexico’s GDP. We should remain competitive, as a country and as a region, making the most of the opportunities brought by this pandemic.
Q: What are your views on recovery expectations after the pandemic?
A: Considering that the economic impact was caused by a pandemic rather than an economic crisis, we will see a faster recovery. We are optimistic about 2022 and we expect to return to pre-pandemic levels in 2023 or 2024. The automotive sector in Mexico has proven to be flexible by adapting quickly at the upstream and downstream level of the value chain. Mexico has vehicle production overcapacity and should demand in the US increase, as we expect it will, the country is ready to supply those vehicles.
Q: What are AMIA’s strategies moving forward?
A: We will further strengthen our collaboration with local and federal authorities and work together for the sector to thrive. We need to send the right signals of where the sector is heading to, while addressing the government’s priorities to create a fertile environment for the sector.
The role of local governments has become more and more relevant to promote investment in their respective states. Potential investors are now reviewing states on a local basis. We are committed and active with local governments so they can better promote both legal certainty and the right investment conditions.
As the new Executive President of AMIA, I am also committed to introducing changes to the association, both internal and external. Once all plans are approved by our members, you can expect significant changes in how AMIA engages in relationships and partnerships with the media and the government. AMIA should be a strong representative of the most important sectors of the Mexican economy at this time.
Toyota Leading the Industry’s Transformation
Luis Lozano
President of Toyota
Read the complete article Akio Toyoda, the current President of Toyota Motor Corporation, says the automotive industry is currently going through a transformation process that we will not experience again in the next 100 years. “To put this in perspective, you have to think that Henry Ford’s Model T, which reinvented the sector and shaped it as we know it today, is more than 110 years old,” said President of Toyota Motor Mexico Luis Lozano during the opening presentation of Mexico Automotive Summit 2021 on Wednesday, Mar. 24.
“The world is in a permanent transformation. However, the pandemic has accelerated innovation in industrial processes from all sectors, including the automotive industry, where change was already underway,” said Lozano. In all industries, there are three drivers that can accelerate transformation in a significant way, according to Lozano:
1. New consumer needs
2. Business disruption
3. Abrupt public policy changes with the potential to transform a society’s reality
In the automotive sector, Lozano explained, the change in consumer needs is quite clear. “In many of the most developed markets in the world, young people no longer want to buy cars. I see it even with my children. When I was old enough to drive, any excuse was good to get my parents to lend me the car. Meanwhile, my children are not interested in driving,” he said. “There are changes in consumers that are more profound than what we can estimate now.”
All industries today are threatened by disruption, Lozano added. But crises have been a driver for change at Toyota. “We have grown stronger and learned from them (crises). The most severe crises we have suffered in recent years, such as the Fukushima earthquake, were crucial because they broke many value and supply chains,” he said. “It made us question the way we operated in Japan.”
Today, Toyota is also going through a profound transformation, said Lozano. “We want to move from being an automotive company to being a mobility company. When people can move anything is possible,” he continued. The company will focus on developing new products and solutions centered around Connected, Autonomous, Shared, Electrified (CASE) technology.
When it comes to electrification, Toyota has high aspirations. By 2025, the company plans to have an electric version of every vehicle in its lineup. By 2030, it aims to generate most of its revenue from EVs. Meeting these goals and achieving this transformation, Lozano said, is not just Toyota’s job. “There are non-traditional partnerships in the automotive industry that are needed to achieve our CASE goals. We have, for example, partnerships with Uber, Microsoft and even a joint venture with an air taxi company.”
Annually, Toyota produces 10 million vehicles at 53 manufacturing plants worldwide. Fifteen of them are in North America, 10 in the US, three in Canada and two in Mexico. In addition, Lozano highlighted that the brand markets the world’s best-selling car: Corolla. “Toyota has the world’s best-selling electrification technology, embedded in the Prius model.”
Felipe Villareal
CEO of Alian Plastics
Smart Manufacturing to Attract New Customers
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More about this person Q: How has the pandemic influenced Alian Plastics’ operations?
A: It created a revolution for everyone. We needed to adapt our strategies prioritizing health and safety, while focusing on our staff and sales. In March, most of our automotive customers started to suspend operations. Fortunately, we started a diversification process toward other industries in 2018. Our projects required years to be developed and by starting in that year, we were able to complete our diversification successfully in February, gaining participation in the HVAC niche. Amid the shutdowns mandated by the government, the HVAC industry remained an essential sector, which helped to keep our operations running.
At that moment, we were worried about how the automotive sector was going to behave after the lockdown. Our surprise was that companies resumed operations stronger than before. Premium brands we work with, such as Audi, Tesla and BMW, presented stronger demand than before the lockdown. We adapted our staff accordingly while implementing cost reduction strategies to keep the company healthy.
Q: You have proven successful in leading through times of crisis. What elements have helped that success?
A: Maintaining balance with the help of family and exercise has been essential. At the corporate level, protecting our staff was our priority. A strong, safe and stable worker will perform well. Even though there were times when I myself felt uncertain about the future, I needed to provide employees certainty.
A second element was home office. We were not sure how remote work would turn out but through KPIs and clear goals, we made it work. The mental health of everyone was really important, too.
Q: Given the company’s successful strategy of diversification, how has Alian Plastics’ portfolio changed?
A: The automotive industry continues to be our core business. The second niche we are focusing on is HVAC, which is a demanding industry in terms of quality and delivery times. We are handling a just-in-time delivery every four hours. In the beginning, it meant adapting our day-to-day operations since automotive companies pick up products only two or three times a day. I accepted this challenge gladly because we recognized the potential of our operations. This year, we also entered a new industry: toys. We manufactured pieces for iconic characters, such as Barbie and Batman, and for toy animals. We also invested, despite COVID-19. We bought new machines and robotic end-arms and grippers.
Q: The pandemic also drove companies toward greater levels of digitalization. How has Alian Plastics experienced this trend?
A: We started our smart manufacturing projects in 2019, collecting data faster and making better decisions in a really short time. 2020 was a year of consolidation and I feel very proud of our IT team. Having all the tools available to perform our job remotely and efficiently provides us with the capabilities to diversify our operations. We enabled Industry 4.0 tools for each one of our presses. These tools send us alerts in real-time to identify area to address, whether it is production, quality, materials or maintenance.
Martin Toscano
President and General Manager of Evonik
Q: How did the pandemic influence Evonik and its clients’ business?
A: When the Covid-19 pandemic started, our top priority was to protect the health and well-being of all our employees, while we focused on securing the value chains we take part in with our chemical specialty products. We adapted our distribution and production operations in the country, following strict safety and health guidelines.
From the very beginning of the pandemic, the chemical sector was labeled as essential. However, many of the industries we participate in were not labeled equally at the beginning. In some sectors, our customers were more affected than others. And obviously, priorities changed as companies adapted to the new reality. This resulted in delays for some projects and acceleration for many others. Communication channels changed with our customers since we are used to developing projects, with our products and solutions, on-site. We created a variety of online activities where Evonik makes the most of its global network. We brought experts in different technical and commercial areas closer to our customers in Mexico. This was a leap toward higher quality in the way we interact with our customers.
I believe things will not be black and white when it comes to communication channels in the new normal. There will be a mix of on-site communications and virtual meetings. This allows us to make the most of our global footprint by placing experts in front of key stakeholders more efficiently. One of the remaining challenges is implementing strategies to cope with this ongoing situation. We need to evaluate those elements that are here to stay. B2B companies such as ours have an obligation to think about our role in the future and how disruptions in different sectors will impact our products and technologies. This adds up to a massive advancement of digitalization. In a 12-month period, digitalization grew the equivalent of what we went through over the past 15 years. We remain open and confident we will achieve greater levels of innovation and the development of new technologies along the value chain.
Q: Why did Evonik realign its structure to focus on smart materials, specialty additives, and nutrition & care?
A: Our company structure is systematically oriented toward our operational business. The engine of our company consists of the five divisions with their business lines: Smart Materials, Specialty Additives, Nutrition & Care, Performance Materials and Technology & Infrastructure. In Mexico, this proved to be the right strategy in 2020 for delivering good results. This is particularly due to the diversity of our product portfolio and it is resilient. And we operate and supply practically to all manufacturing and industrial sectors and markets. To increase the value of the company, we target three strategic focus areas: portfolio, innovation, corporate culture.
Q: The pandemic accelerated different trends, among them additive manufacturing. What is Evonik’s focus in this regard?
A: This is an area where Evonik continues to invest, particularly in the high-performance polymers business line where we participate actively. In this segment, we bet on the future while actively developing these technologies. We have a clear strategy
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that involves investments and acquisitions, as well. We are aware of the promising future this area represents.
Q: What business lines were boosted in Mexico due to the pandemic?
A: In 2020, compared to 2019, we grew our business in Mexico. Some business lines experienced more challenges than others during the peaks of the pandemic but all businesses have proven to be resilient, among them automotive, agriculture, pharmaceuticals, among others. Depending on the sector, our business lines adapted to market conditions and the general situation. This has been essential to navigate the pandemic.
After the announcements made by local authorities in May 2020, automotive, mining and construction were shortly after considered also essential. In 2H20, we started to feel greater levels of recovery. In the automotive industry, a regional effort was made toward industrial recovery involving leaders from Mexico, Canada, and the US. For Mexico, fast recovery in the US is also important due to the role we play in the US auto parts market.
Despite the challenges, it has been a really good year for us, full of learning. Although we continue to navigate the storm, teamwork and our close relationship with customers and key stakeholders have been essential, while being flexible in how we adapt to their needs. Our next challenge is to continue growing in a scenario where supply chains are relocating to the region, a direct consequence not only of the pandemic but also of USMCA. Without a doubt, there is a clear trend to evaluate value chains that allow relocation of operations to North America. 2020 saw also the update of Mexico’s FTA with the EU, which brings additional opportunities to the table. One of the most outstanding sectors that keeps growing is agribusiness. The country is starting to be a reference for food exports to Europe and Asia, on top of being a key player for US food markets.
Q: What changes are here to stay?
A: Process digitalization and automation, the ways we do business and supply chain relocation, mainly from Asia, are trends that are here to stay. Particularly in 2020, the US supply chain relocation created more jobs than FDI. Last year tested all sectors equally. It also allowed us to better understand our capabilities as an organization and team in the country. Without question, human capital continues to be a priority and as organizations, we need to understand what the future is and the kind of profile future business leaders should have based on the challenges we are facing today.
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More about this person
Mexican Automotive Industry: SWOT Analysis
Read the complete article The automotive sector has experienced tremendous changes while setting the stage for a new generation of vehicles and industry standards. “The industry will change more in the next five to 10 years than it did in the previous 100 years,” said David Adams, President of Global Automakers Canada, to MBN.
After interviewing more than 150 leaders in the sector over the last year, Mexico Business News presents a SWOT analysis of the sector. Strengths and weaknesses refer to internal circumstances, while opportunities and threats deal with external elements influencing the sector directly.
Strengths Production capacity of 5.5 million vehicles. IHS Markit estimates the country’s production capacity between 5.5 million and 6 million units. Mexico hits its light vehicle production peak of 3.9 million units in 2017. At the time, neither Toyota nor BMW had started operations, so Mexican production could easily surpass the 4-million-units production mark by 2024. “One of the biggest achievements of the automotive sector over the last decade is Mexico’s emergence as an important pole for development, which represents a unique opportunity for the country to transform itself into a global platform for advanced manufacturing and innovation,” said Alberto Torrijos, Automotive Sector Leader Partner at Deloitte.
Weaknesses Idle vehicle production capacity. IHS Markit also reports that there is a lack of production capacity for SUVs and pickups. Much of the installed production capacity is focused on compact and subcompact models, when foreign markets are demanding more SUVs and pickups. “Mexico has a problem of idle capacity. Mexico’s installed production capacity is around 5.5 million units. There is a lack of production capacity for SUVs and pickups,” said Guido Vildozo, Main Partner at IHS Markit.
Opportunities USMCA’s rules of origin. Leaders from clusters, associations and major OEMs agree that the enforcement of USMCA’s rules of origin for automotive goods will strengthen the role of vehicle and auto parts manufacturing in North America, a unique opportunity for Mexico. This also means the need for strategies to foster steel and aluminum production in the region. “Without a doubt, USMCA will bring more opportunities for Tier 2s. We will also identify potential suppliers that can increase their production capacity,” said Carmen Hernández, President of Jalisco Automotive Cluster.
Threats
Government policies to address the impact of the pandemic on
suppliers. Among G20 countries, Mexico has the second-lowest support programs for private companies. Mexico has destined just 0.3 percent of its GDP to support companies and individuals, according to the IMF. This is a threat for a sector that is costsensitive. “Only 7.8 percent of surveyed companies confirmed having received some kind of support, while the rest (92.2 percent) did not receive any help whatsoever,” said Guillermo Prieto, Executive President of AMDA.
Lourdes Cobos
Operations Manager of Yanfeng Automotive Interiors México
Automotive Interiors Taken to the Next Level
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More about this person Q: How did Yanfeng Automotive Interiors (YFAI) transition from a joint venture to a successful automotive company?
A: YFAI was born as a joint venture with Johnson Controls. Five years ago, Johnson Controls sold its interiors division to Yanfeng, mostly based in China. Yanfeng acquired 80 percent of Johnson Controls’ participation in its plants for interiors. In North America, we have 22 active plants, four of them in Mexico and one more to be inaugurated in the near future. One of our biggest achievements is successfully transitioning from one corporate culture to another. Yanfeng is relatively young in North America but we are expanding our presence in the region. In Mexico, all our plants are focused on automotive interiors but soon we will announce an upcoming plant that will manufacture seat components, as well.
Q: What are YFAI’s strategies regarding local tech design and engineering?
A: In the Queretaro area, our tech design center has 40 Mexican designers who are working on different projects. We are looking forward to doubling our capacity in the coming years. The center is already working on several innovative projects with multiple OEMs, and others. Mexico plays an important role in YFAI’s approach to innovation.
Q: Which companies have helped YFAI to build its presence in the region?
A; We work with multiple OEMs throughout North America. Our plants in Ramos Arizpe produce components for Toyota in the region, as well as BMW. We have room to grow in the local market and that is one of our current strategies, alongside strengthening our technical and design center in Queretaro to attract more local customers. We are pioneers in automating leather cutting for automotive interiors. This gives us freedom to design our patterns and adapt to our customers’ needs. At our new plant in Ramos Arizpe, Coahuila, we will have our excellence center where customers can view our product portfolio and prototypes.
Q: How has the pandemic influenced YFAI’s operations?
A: In the automotive industry, adaptability is key. For over two months, our operations were idled, as was the rest of the industry. Naturally, our strategies changed and we adapted to the circumstances by investing time into strategic planning, prototypes, team projects and installing new equipment. I can proudly say that during this period, we did not have to reduce our workforce. Now that we are back, we are stronger, have new projects and, in fact, we are starting our recruitment process for our new plants.
Q: What are YFAI’s plans for the future?
A; We will continue to innovate in automotive interiors. YFAI is focusing on prototypes for doors, instrument panels and center consoles, remaining flexible to our customers’ needs, including textures, colors, designs and shapes, among many other elements. Betting on Mexican talent will be essential to growing not only design operations but also developing a specialized workforce. I see Yanfeng as a strong company in the North American region with a diverse product portfolio.
Ignacio Moreno
CEO of Bocar Group
Anticipating Customer Needs to Sustain Growth
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More about this person Q: What values have allowed Bocar Group to remain a market leader for decades?
A: Bocar Group was founded more than 60 years ago by Mr. Federico Baur. Over the years, the company has lived by its core values and principles. People are the company’s main asset and all our employees follow our values as well as our primary concept of discipline, order, and cleanliness. The Baur family continues to play a fundamental role in the company, keeping us on the path of success set by our founder. We have built a successful relationship with our customers and created a diverse customer portfolio based on win-win relationships.
Q: How will USMCA’s new rules of origin influence aluminum processes?
A: Opportunities are similar due to our diversified portfolio. We supply OEMs in the US, as well as European and Asian companies based in the US. Our main market is in North America, so the fact that USMCA has been signed provides us with certainty about the future of our operations and the future economic growth of the region. Risks remain low as long as we comply with the norms established in the agreement.
Q: How did Bocar Group embrace the effects of the pandemic?
A: In the beginning, the situation was complicated for everyone. In March, the US started to close its borders and at that very moment, we decided that our priority was our employees’ safety and well-being. Fortunately, we prepared ourselves by having enough stock available for our customers, which allowed us to maintain supply even though operations remained suspended. We implemented state-of-the-art sanitary protocols to resume operations and we were among the first companies to be cleared by IMSS to go back to work. We handled the crisis effectively. Bocar Group has the capabilities to endure the peak of the crisis, avoiding supply chain disruptions for us and our customers.
Q: How are you participating in the development of CASE vehicles?
A: With the incoming US administration, the trend towards electric and hybrid vehicles will increase considerably. Our strategies are also heading in this direction. Most of our customers have announced billions in investments in electric and autonomous vehicles as a standalone or through a partnership. This has driven us to take part in this trend. We are anticipating their requirements and maintaining close contact with their engineering departments during the early stages of the R&D process. CASE vehicles are a reality and they are coming at a fast rate. We take this seriously, not only at our plant in the US but also at our plants in Mexico.
Q: What opportunities can the Mexican automotive industry take advantage of this year?
A: Engineering and design are great opportunities for the country. We have capable engineers who can support these efforts but we have to educate them to embrace engineering. In this way, we could advance from being a country with solely high-quality manufacturing to being a country that also contributes to product development. Tooling development also remains an important opportunity. We must also capitalize on USMCA.
What Should Companies Do to Embrace Industry 4.0?
Mauricio Blanc
Executive Director Latin America of OMRON
Social-distancing measures made smart manufacturing capabilities the best option to prevent outbreaks and assure ongoing, efficient operations. Companies, from large manufacturers to small Tier 2 suppliers, are looking for strategies to balance the initial investment of a new technology and cash flow. Leaders from robotics, automation and technology integration solution companies shared their views on the steps companies should consider when embracing Industry 4.0, particularly regarding an adequate ROI analysis.
Typically, Industry 4.0 solutions are complex in hardware and software required to collect, manipulate, store and normalize data. Our solutions are simple, transparent and the initial investment is not that high. We allow customers to get to the same goal in a very clear and secure way. Often, potential customers do not believe that what we are telling them is possible. We usually create a demo solution for the customer to test it. Companies can see the effect that monitoring quality and efficiency can have, representing millions in savings. Once they try the demo, they want more. Demos have helped a great deal in boosting Industry 4.0 awareness. With USMCA, we expect greater automation levels, higher wages and consequently higher quality for auto parts manufacturing.
Sergio Bautista
Robotics and Discrete Automation Director of ABB México
The pandemic has highlighted the vulnerabilities of a manufacturing plant that strongly relies on manual labor. Before COVID-19, digitalization was a fashionable topic the industry was aware of but did not really embrace it. Now, it is critical. Although investments are not yet there, companies are getting their budgets ready to implement these solutions. ROI sometimes took a backseat when the priority was to remain in operation. ABB has been a strong player in Industry 4.0 for years. Since 2019, all of our robots are able to connect to Wi-Fi networks. We have also introduced OmniCore, our new controller for smaller robots. This is the sixth generation of our platform, which is now slimmer, lighter, more intuitive and more energy efficient. By the end of 2020, we will release a new lineup of collaborative robots.
Sergio Macías
The first step to advance Industry 4.0 is to take advantage of cloud and SaaS solutions. Cloud solutions “flatten the curve” of the initial investment. That being said, before technology, there need to be processes. Technology is just a tool to be prepared for strict requirements, short times and many other issues automotive suppliers face. The second element is to establish the data that will be required to make the decision, as well as streamlining the data. Once that is in place, we can decide which solution fits best. This applies to all companies throughout the chain, from big global players with clearly defined processes to small companies aiming to break through. My recommendation for Mexican companies is to be open to innovation and to adapt. Openness can change and create processes for the better. It is a balance between a long-term vision and being agile enough to achieve short-term results.
Miguel Barbeyto
CEO of Mazda de México
Mazda: Pandemic-Resilient, Forward-Looking
Q: How has Mazda adapted to the pandemic?
A: It has been quite an experience because we were all taken by surprise. Many of my colleagues told me that I was exaggerating when on March 13 we sent everyone to work from home to prevent any contagion. At that time, one of the main objectives was to give the employees peace of mind but also safety.
I have always said that companies are made of people and without them, there are no companies. That said, the most challenging thing was to understand what our employees, our distributors, Mazda Corporation and our customers wanted. Achieving a perfect balance between these players was tremendously challenging but also rewarding. We were proactive in implementing actions, strategies and tactics to get around the pandemic. The main focus was always to keep our employees and customers safe while continuing to deliver results. Almost nine months after the pandemic hit, we can proudly say that this strategy has worked.
Beyond that, we all learned a great deal, both professionally and personally. We learned that it is not necessary to go to an office to work. We learned to communicate through technology and to live together as a family while working. Despite all the unfortunate things that this crisis has brought, it has also created good opportunities because we learned to value many things that before we likely did not. Most of all, we realized the importance of people and health.
Q: What drove Mazda’s results during the pandemic?
A: Our performance was a result of our people. At Mazda, in addition to being a team, we are a family. Due to great communication between employees, with our headquarters in Japan and with our clients, we had better results than expected. This may sound like a cliche but it’s true: even if a company has a good product, at a good price with excellent aftersales service, without the team’s enthusiasm to help customers, everything else is worthless.
Mazda has been in Mexico for 15 years and we have never achieved results like we did this year. In October, for example, Mazda exported 206.9 percent more units than in the same period last year. Mazda is a brand that, beyond the features and good performance it offers, has a special charm that has made Mexicans fall in love with our products.
Q: What role are electric and hybrid vehicles playing in Mazda’s lineup in the country?
A: In Mexico, we will soon introduce a mild-hybrid technology in two of our vehicles. The technology helps to decrease pollutant emissions and improves vehicle efficiency. This mild-hybrid system uses a small Integrated Starter Generator (ISG) to capture the energy that is normally wasted during braking and stores it to power the vehicle’s electrical systems, reducing the load on the engine and saving fuel in the process.
Q: What strategies is Mazda implementing to increase regional value content (RVC)?
