Aftermarket Investment Produces Dividends for AllMon, 09/01/2014 - 16:40
Q: What measures is DAI taking to increase exports and diversify its markets?
A: We are a Mexican company that has come to export to many South American countries like Colombia, Ecuador, Venezuela, Peru, and Chile. In the future, we hope to start exporting to Europe, particularly to countries such as Denmark, Germany, Spain, and the UK. We manufacture components that have rubber and metal parts with the exception of wheels. We do not manufacture for all brands, but instead we focus on what the market demands. We import what we do not manufacture, but those imports must adhere to our quality requirements or we do not accept them. At the moment, our group of companies has over 38,000m2 of facilities where we process rubber, and we have four Banbury machines capable of producing 50 tonnes of rubber a day that we sell to other companies. We have automotive stampings, workshops, and laboratories that have been ISO certified.
Q: How do you optimize your distribution network to provide the best products and services to your clients?
A: We are innovating in terms of the sales points for our products. We are training our personnel to familiarize them with our products, to transmit their advantages, and to successfully sell them. We also offer courses and conferences for our sales people and we have alliances with institutions like CONALEP and IPN where we show students how our machinery works and the quality of our goods. The courses we offer in telemarketing, counter-sales, and wholesales are completely free and are conducted nationwide. We also employ graduates from mechanical schools who have knowledge of aftermarket practices. They in turn offer technical conferences to mechanics and workshops representing this sector of the automotive industry.
Q: How challenging is it to find a balance between quality and cost in a market driven by price pressure?
A: Mexico is seeing an increasing demand for quality goods. A vehicle has become the second most important asset acquisition for a family, so if quality parts are not used to maintain it, unnecessary expenditure is incurred. Our purpose is to consider quality above all things. More than 40 vehicle brands are being sold in Mexico, each with several models, which implies a wide and varied need for parts. Therefore, we have focused on a single product line covering transmissions, motor supports, and buffers. We now have to convince people that quality products are an investment. If someone buys a vehicle for MX$150,000 (US$11,500), they need to take care of that investment. The same thing is true for someone who buys a car for twice that amount, so we have to educate the entire market. We do this through mechanic schools. Mechanics usually graduate from technical schools or automotive engineering schools, so they know that paying for quality is worth it. There is no doubt that people will continue to buy cheap products, but if a person buys only based on price, they will become victims of their own cost-cutting. We are leaders in the market because we sell quality products. If we did not, we would be on par with all companies selling cheap products bought from around the world. Our parts have a warranty and the mechanics recognize the value of that.
Q: What advances in technology has DAI taken advantage of with the growth of the automotive industry?
A: We want to continue innovating and strengthening our image within the market. Throughout all of Mexico, we have led a publicity campaign drawing attention to DAI as being synonymous with quality, comfort, and economy. We believe that to retain a position in the market, we need to show our brand and our quality. It is just as important to manufacture quality products as it is to carry out a good marketing campaign. We have a presence of 66% in the market and our plan is to increase that in all aspects. We have also developed a new packaging system called DAIPack. Our parts are placed inside a new plastic container and packaged in normal boxes. These plastic containers are hermetically sealed, protecting the parts from adverse weather conditions, and creating added value for our customers. The components are engraved with our logo to prevent piracy. We have found that some workshops have sold fake products with our boxes and we have taken legal action to curb this. We respect our market and our distributors and stand behind our agreements 100%. We also have new designs that we want to implement through our new plant that opened in early 2014, for which we have bought new machinery for plastic injection.