Aftermarket Provides Growth Opportunity

Q: How important are the original equipment and aftermarket segments for NSK’s operations in Mexico?

A: Our operations in Mexico are focused 90 percent on original equipment for the automotive industry and 10 percent on the aftermarket and industrial machinery segments. We will, however, increase our operations in the latter segments following NSK’s global restructuring due to the tariffs imposed by the administration of US President Donald Trump. One of NSK’s production lines in Mexico will be moved to Poland. In exchange we will receive two production lines from the US. We recently received two others and we expect to produce around 6,000 bearings for the industrial and aftermarket segments every day. In three to four years, aftermarket and industrial machinery will account for 40 percent of our operations, with the remaining 60 percent focused on original equipment.

Our presence in Mexico’s bearings market totals 25-30 percent. In Mexico, NSK has a bearings manufacturing facility, a distribution center and our joint manufacturing facility in Silao with BorgWarner called NSK-Warner. We will expand NSK’s wholly-owned operations to add two more plants, plus a new facility to manufacture the balls in our bearings.

Q: How have US tariffs on steel imports impacted NSK’s global operations?

A: We require a special type of steel that was not affected by the tariffs imposed by the US government. Since this steel is not produced in the US, it enters that country duty-free. However, some production lines located in China and focused on the US market will be relocated to Mexico because those use taxed steel. We are changing the way we work to adapt to this new situation. Our bearings do not employ plastic parts yet, so we are working to develop the capabilities of steelmakers in Mexico and the US so we can source more raw materials locally.

Q: Why should NSK be the preferred choice for bearings among OEMs?

A: A regular car usually has around 169 bearings, so there are opportunities for all manufacturers in this sector. We are not the most inexpensive option in the market, so we may not be the most price-competitive supplier of bearings for doors, for instance. However, clients approach us when they need more specialized bearings, such as for drivetrains and wheels, which are our main niches. NSK also has the competitive advantage of offering lifelong warranties on its products rather than the five years that a regular vehicle’s warranty covers. Clients trust the quality and durability of NSK’s products.

We supply bearings for Audi and Volkswagen in Europe and have started exporting to China from Silao. In terms of wheel bearings, NSK was recently awarded a contract to supply Tesla, which offers new opportunities for the company’s operations in the US and Mexico. Our joint-venture with BorgWarner manufactures clutches for Honda and Toyota drivetrains. We started working with four assembly lines at this plant and thanks to our quality and timely deliveries, we received another four machining lines.

Q: How is NSK innovating to improve vehicle fuel-efficiency?

A: NSK has seven technical centers located in Asia, the US, Europe and Brazil that are constantly innovating in areas such as raw materials and manufacturing processes. We are betting on lightweighting, for instance. We have reduced the weight of a drivetrain bearing from 2kg to 100g through the use of alloys and special machining processes. NSK is also testing plastic alloys with the objective of eventually introducing these products to the market and further reducing weight without compromising quality.

Q: How is NSK promoting the adoption of best practices among its suppliers to ensure productivity?

A: We help our suppliers understand our world-class manufacturing system rather than only asking for quality production. Moreover, we help them develop their own quality manuals. For instance, the employees from our Japanese suppliers Atsumi and Samtech were present at NSK’s Silao facilities for six months to learn how we file reports, conduct client visits and take care of audits so they understand the needs of the automotive industry. We work in a similar way with small Mexican suppliers.

NSK is a Japanese supplier of bearings for vehicles and industrial machinery. The company has a history of over a century. In Mexico, it has a plant and a distribution center in Silao, as well as a joint facility with BorgWarner