Adding to Regional Integration

Queretaro has made a name for itself among automotive companies thanks to the quality of its talent, the infrastructure of its industrial parks and its solid support industry. However, the availability of tooling solutions, staff turnover and new certifications present fresh challenges and opportunities for local players to fulfill their potential, says Daniel Hernández, Director General of the Queretaro Automotive Cluster.
“The Bajio region represents 29 percent of Mexico’s auto parts production and INA estimates that figure could grow to 40 percent as new OEMs arrive to the country,” says Hernández. While Queretaro is renowned for its Tier 1 companies, the state’s automotive industry also includes indirect suppliers of components and added-value processes, as well as a strong support industry. Hernández says that Germany, Japan and the US are the main sources of FDI in Queretaro. “Almost 27 percent of the state’s assembly plants are German, followed by Japan with 19 percent, the US with 13 percent and then a combination of Canada, Sweden, China and South Korea,” he says.
Investment continues to flow into Queretaro and neighboring states such as Guanajuato, which only increases the need to boost the region’s competitiveness. The Queretaro Automotive Cluster plays a key role in this process by helping local players overcome challenges common to the local industry. However, this should not be an isolated effort. Hernández points out that rather than competing, clusters should work together to support the industry as a nation. “Clusters can achieve a greater level of regional integration but we need to support the complementarity between the activities in each region,” he says. The Queretaro Automotive Cluster is already working with CLAUGTO, the government of Aguascalientes and of San Luis Potosi to launch an international cooperation project with the Japanese International Cooperation Agency (JICA) to develop a structured supply chain that can support strategic players in the region.
According to Hernández, tooling is a major challenge for both Queretaro and Mexico. “A substantial percentage of tooling components are imported from Asia,” he says. “Instead, both the public and private sectors should work together more actively to develop proper tooling technicians and invest in the technology needed to produce these solutions locally.” Tooling companies in Mexico are focused on maintenance, adjustment and engineering adaptations. However, it is high time for local players to participate in design and manufacturing of these components, according to Hernández. “Companies arrive to Queretaro looking for manufacturing centers for molds, dies and other equipment,” he says. “A value chain can only be as strong as its supporting industry.”
Labor is another challenge that plagues Queretaro and the Bajio region in general, Hernández says. “Staff turnover is a natural process that stems from people looking for better work conditions,” he says. “However, it becomes a problem when brain drain spins out of control and companies’ production is affected.” In the case of Queretaro, some industrial areas suffer greater turnover problems because of their geographical location and transportation availability. “In the Bajio alone, the Ministry of Economy expects demand for 30,000 engineers by 2023 because of the industry’s growth,” Hernández points out. The cluster is working with companies and the government to solve this problem through training and specialization to meet the industry’s needs.
The cluster also introduces tools such as the Toyota Production System to its members and organizes certification programs so that members can achieve lean, efficient and competitive operations. This, however, is but the first step for companies to reach the level of certification needed to participate in the industry. Says Hernández: “The cluster needs to push for companies to gain the certifications that they need and free their operations from faulty components.” Since the IATF certification is oriented to risk analysis and minimization, all companies involved in vehicle and auto parts production must have a certified quality management system. “Even companies that are not part of the automotive value chain such as tooling and clamp suppliers must be certified to continue participating in the industry,” he adds.